This newsletter is a listing of the latest changes in export control regulations through June 30, 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.
Check out our newly added LICENSING TIPS SECTION
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and
persons denied export privileges by the United States Government.
REGULATORY UPDATES
President
President Biden Continued The National Emergency with Respect to Belarus
June 13, 2024: On June 16, 2006, by Executive Order 13405, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Belarus and other persons to undermine Belarus’s democratic processes or institutions, manifested in the fundamentally undemocratic March 2006 elections; to commit human rights abuses related to political repression, including detentions and disappearances; and to engage in public corruption, including by diverting or misusing Belarusian public assets or by misusing public authority.
The actions and policies of certain members of the Government of Belarus and other persons, and the Belarusian regime’s harmful activities and long-standing abuses, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13405, which was expanded in scope in Executive Order 14038, must continue in effect beyond June 16, 2024. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13405.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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President Biden Continued The National Emergency with Respect to North Korea
June 13, 2024: On June 26, 2008, by Executive Order 13466, the President declared a national emergency with respect to North Korea pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula. The President also found that it was necessary to maintain certain restrictions with respect to North Korea that would otherwise have been lifted pursuant to Proclamation 8271 of June 26, 2008, which terminated the exercise of authorities under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) with respect to North Korea.
The existence and risk of the proliferation of weapons-usable fissile material on the Korean Peninsula and the actions and policies of the Government of North Korea continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For this reason, the national emergency declared in Executive Order 13466, expanded in scope in Executive Order 13551, addressed further in Executive Order 13570, further expanded in scope in Executive Order 13687, and under which additional steps were taken in Executive Order 13722 and Executive Order 13810, must continue in effect beyond June 26, 2024. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for 1 year the national emergency declared in Executive Order 13466 with respect to North Korea.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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President Biden Continued The National Emergency with Respect to the Western Balkans
June 13, 2024: On June 26, 2001, by Executive Order 13219, the President declared a national emergency with respect to the Western Balkans pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions of persons engaged in, or assisting, sponsoring, or supporting, (i) extremist violence in the former Republic of Macedonia (what is now the Republic of North Macedonia) and elsewhere in the Western Balkans region, or (ii) acts obstructing implementation of the Dayton Accords in Bosnia or United Nations Security Council Resolution 1244 of June 10, 1999, in Kosovo. The President subsequently amended that order in Executive Order 13304 of May 28, 2003, to take additional steps with respect to certain actions that obstruct implementation of, among other things, the Ohrid Framework Agreement of 2001 relating to Macedonia (what is now the Republic of North Macedonia).
The actions of persons threatening the peace and international stabilization efforts in the Western Balkans, including acts of extremist violence and obstructionist activity, and the situation in the Western Balkans, which stymies progress toward effective and democratic governance and full integration into transatlantic institutions, continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13219, under which additional steps were taken in Executive Order 13304, and which was expanded in scope in Executive Order 14033, must continue in effect beyond June 26, 2024. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden is continued for 1 year the national emergency declared in Executive Order 13219 with respect to the Western Balkans.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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Department of State, Directorate of Defense Trade Controls (DDTC)
Annual Report to Congress On Direct Commercial Sales Authorizations to Foreign Countries and International Organizations for Fiscal Year 2023
June 3, 2024: The Department of State provided it’s annual report to Congress on direct commercial sales. This report documents defense articles and defense services licensed for permanent export under Section 38 of the Arms Export Control Act (AECA), 22 U.S.C. 2778, to each foreign country and international organization during fiscal year (FY) 2023, in response to the requirements in Section 655(b)(3) of the Foreign Assistance Act (FAA) of 1961, as amended. The Department of Defense will report International Military Education and Training activities separately.
The report specifies the aggregate dollar value and quantity of defense articles, and defense services, authorized to each foreign country and international organization during the fiscal year, as well as data on the actual shipments of those licensed transactions. The actual-shipment data shows the total dollar value of all shipments that were authorized and exported during the fiscal year to each destination. Authorizations in this report are categorized based on the destination country. Authorizations applicable to multiple countries in the appendix are included under the designation “Various.” Documentation for shipping purposes requires a definitive destination be declared. Accordingly, actual shipments for those articles approved under the designation “Various” are attributed to the country listed on the shipping documentation.
The reported value of authorizations for defense articles and defense services does not correlate precisely to the value of articles actually transferred during the reporting period. The reasons for this are as follows: Most licenses issued for defense articles are valid for four years and may be used throughout the four years to execute authorized transactions. Similarly, manufacturing license and technical assistance agreements cover a wide range of programmatic activities for multi-year periods (generally exceeding the four-year validity period of defense-article export licenses). Export authorizations furnished in FY 2023 also include certain activities occurring in prior years, because the scope of the Department’s regulatory authority over such agreements continues for as long as these multi-year agreements remain in effect.
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=1707b48697e24a140083b3b0f053af31 and
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=6b07b48697e24a140083b3b0f053af34
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Department of State Sanctions Israeli Group for Disrupting and Destroying Humanitarian Aid to Civilians
June 14, 2024: The Department of State designated Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza. For months, individuals from Tzav 9 have repeatedly sought to thwart the delivery of humanitarian aid to Gaza, including by blockading roads, sometimes violently, along their route from Jordan to Gaza, including in the West Bank. They also have damaged aid trucks and dumped life-saving humanitarian aid onto the road. On May 13, 2024, Tzav 9 members looted and then set fire to two trucks near Hebron in the West Bank carrying humanitarian aid destined for men, women, and children in Gaza.
The provision of humanitarian assistance is vital to preventing the humanitarian crisis in Gaza from worsening and to mitigating the risk of famine. The Government of Israel has a responsibility to ensure the safety and security of humanitarian convoys transiting Israel and the West Bank enroute to Gaza. The U.S. Government will not tolerate acts of sabotage and violence targeting this essential humanitarian assistance. As such, the U.S. Government will continue to use all tools at our disposal to promote accountability for those who attempt or undertake such heinous acts, and expects and urges that the Israeli authorities do the same.
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Renewal of Defense Trade Advisory Group Charter
June 21, 2024: 89 Fed. Reg. 50661: The Department of State announces the renewal of the Charter for the Defense Trade Advisory Group (DTAG) for another two years. The DTAG advises the Department on its support for and regulation of defense trade to help ensure the foreign policy and national security of the United States continue to be protected and advanced, while helping to reduce unnecessary impediments to legitimate exports in order to support the defense requirements of U.S. friends and allies. It is the only Department of State advisory committee that addresses defense trade related topics. The DTAG will remain in existence for two years after the filing date of the Charter unless terminated sooner. The DTAG is authorized by the Federal Advisory Committee Act.
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events and
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=054111f347b242907ddc0c03e16d43ea and
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=4d4111f347b242907ddc0c03e16d43ed
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Statutory Debarment Under the Arms Export Control Act and the International Traffic in Arms Regulations
June 25, 2024: 89 Fed. Reg. 53172: The Department of State has imposed statutory debarment under the International Traffic in Arms Regulations (ITAR) on persons convicted of violating, or conspiracy to violate, the Arms Export Control Act (AECA).
Pursuant to section 38(g)(4) of the AECA and section 127.7(b) and (c)(1) of the ITAR, the following persons, having been convicted in a U.S. District Court, are denied export privileges, and are statutorily debarred as of the date of this notice:
- Akem, Roger;
- Al Eyani, Fares Abdo;
- Bangarie, Tse Ernst;
- Chang En-Wei, Eric;
- Fonguh, Wilson Che;
- Mancho, Godlove;
- Nevidomy, Vladimir;
- Ngang, Edith;
- Ngomanji, Anye Collins;
- Nji, Eric Fru;
- Panchernikov, Igor;
- Roggio, Ross;
- Sendino, Luis Guillermo;
- Sery, Dror of California;
- Micharl, Tamufor Nchumuluh; and
- Tita, Wilson Nuyila.
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events
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Department of State Imposes Sanctions on Lions Den
June 26, 2024: The Department of State is imposing sanctions on “Lions’ Den,” a militant Palestinian group centered in Nablus’s Old City in the West Bank.
In October 2022, Lions’ Den claimed responsibility for several drive-by shootings in the Nablus area. Lions’ Den members opened fire at Israeli vehicles driving close to the nearby settlement of Elon Moreh, injuring a taxi driver and damaging vehicles. In a separate attack, numerous shots were fired toward the West Bank settlement of Har Bracha. In September 2022, Lions’ Den fighters injured and killed Palestinian civilians during clashes between Palestinian fighters and Palestinian Authority Security Forces in Nablus. In April 2024, Palestinian media reported that Lions’ Den fighters targeted Israeli forces with small arms at an Israeli checkpoint in Nablus.
The United States condemns all acts of violence committed in the West Bank, whoever the perpetrators, and we will use the tools at our disposal to expose and hold accountable those who threaten peace and stability there.
https://www.state.gov/sanctioning-violent-palestinian-group-in-the-west-bank/
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Department of Defense, Defense Security Cooperation Agency (DSCA)
DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)
June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy non-standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $80 million.
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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)
June 5, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy standard spare and repair parts, components, consumables, and accessories for F-16 aircraft; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $220 million.
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DSCA Notifies Congress of Potential FMS Sale to Denmark
June 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Denmark has requested to buy eighty-four (84) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and three (3) AIM-120 AMRAAM guidance sections. Also included is the following non-MDE: spare AMRAAM control sections; containers and support equipment; munitions support and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software and support equipment; classified software delivery and support; transportation support; classified publications and technical documentation; studies and surveys; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $215.5 million. The principal contractor will be RTX Corporation, located in Tucson, AZ. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress of Potential FMS Sale to Norway
June 11, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Norway has requested to buy three hundred (300) AIM-120C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM) and twenty (20) AIM-120C-8 AMRAAM guidance sections. Also included is the following non-MDE: AMRAAM containers and support equipment; spare parts, consumables, accessories, and repair and return support; weapons software, support equipment, and classified software delivery and support; transportation support; classified publications and technical documentation; training; studies and surveys; U.S. Government and contractor engineering; technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $1.94 billion. The principal contractor will be RTX Corporation, located in Tucson, AZ. The purchaser typically requests offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
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DSCA Notifies Congress of Potential FMS Sale to The Netherlands
June 13, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of the Netherlands has requested to buy one-hundred seventy-four (174) Advanced Medium-Range Air-to-Air Missiles-Extended Range (AMRAAM-ER) and four AMRAAM-C8 guidance sections. Also included is the following non-MDE: AMRAAM containers, load trainers, control section spares and support equipment; KGV-135A cryptographic devices; Common Munition Built-in-Test (BIT)/Reprogramming Equipment (CMBRE); ADU-891 Adaptor Group Test Sets; integration and test support and equipment; munitions support and support equipment; spare parts, consumables, and accessories, and repair and return support; classified software delivery and support; classified and unclassified publications, and technical documentation; personnel training and training equipment; studies and surveys; Contractor Logistics Support (CLS); U.S. Government and contractor engineering, technical and logistics support services; and other related elements of logistics and program support. The estimated total cost is $678 million. The principal contractor will be RTX Corporation, located in Camden, AR. The purchaser typically requires offsets. Any offset agreement will be defined in negotiations between the purchaser and the contractor.
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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)
June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy seven hundred twenty (720) Switchblade 300 (SB300) All Up Rounds (AURs) (includes 35 fly-to-buy AURs) and one hundred one (101) SB300 fire control systems (FCS). The following non-Major Defense Equipment will also be included: first line spares packs; operator manuals; operator and maintenance training; logistics and fielding support; Lot Acceptance Testing (LAT); U.S. Government technical assistance, including engineering services, program management, site surveys, facilities, logistics, and maintenance evaluations; quality assurance and de-processing team; field service representative(s); transportation; and other related elements of logistics and program support. The estimated total cost is $60.2 million. The principal contractor will be AeroVironment, Inc., located in Simi Valley, CA. There are no known offset agreements proposed in connection with this potential sale.
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DSCA Notifies Congress of Potential FMS Sale To the Taipei Economic and Cultural Representative Office in the United States (TECRO)
June 18, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Taipei Economic and Cultural Representative Office In the United States (TECRO) has requested to buy the following non-MDE: up to 291 ALTIUS 600M-V systems, comprised of an Unmanned Aerial Vehicle (UAV) loitering munition with extensible warhead and electro-optical/infrared (EO/IR) camera; ALTIUS 600 inert training UAVs; Pneumatic Integrated Launch Systems (PILS); PILS transport trailers; ground control systems; associated support, including spares; battery chargers; operator and maintenance training; operator, maintenance, and training manuals; technical manuals; logistics and fielding support; testing; technical assistance CONUS and OCONUS, including for engineering services; program management; site surveys; facility, logistics and maintenance evaluations; quality assurance and de-processing team support; field service representative support; transportation; and other related elements of logistics and program support. The estimated total cost is $300 million. The principal contractor will be Anduril, located in Atlanta, GA. There are no known offset agreements proposed in connection with this potential sale.
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Department of Commerce – Bureau of Industry and Security (BIS)
Department of Commerce Announces Additional Export Restrictions to Counter Russian Aggression
June 12, 2024: In advance of the G7 Summit on June 12, and in concert with the Department of the Treasury and the Department of State, the Commerce Department’s Bureau of Industry and Security (BIS) announced several significant additional export control restrictions and related actions against Russia to further degrade its ability to continue waging war against Ukraine. These actions underscore the Biden-Harris Administration’s unwavering commitment to countering Russian aggression and its illegal, unjustified, and unprovoked war in Ukraine.
Key actions include:
- Cracking down on diversion through shell companies;
- Further cutting off exports of business software that enable Russian and Belarusian defense industries;
- Restricting trade in more items destined to Russia and Belarus;
- Tightening the availability of license exceptions for Russia and Belarus;
- Cutting off trade to foreign companies through the Entity List;
- Issuing Temporary Denial Orders (TDO), which cuts off not only the right to export items subject to the Export Administration Regulations (EAR) from the U.S., but also to receive or participate in exports from the U.S. or reexports of items subject to the EAR;
- Restricting distributors and transhippers.
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BIS Updates Boycott Requester List
June 27, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the boycott Requester List. This list notifies companies, financial institutions, freight forwarders, individuals, and other U.S. persons of potential sources of certain boycott-related requests they may receive during the regular course of business.
The updated public list of entities from the countries listed below who have been identified as having made a boycott-related request in reports received by BIS includes 57 additions. BIS has also removed 127 entities. The list is posted on the Office of Antiboycott Compliance (OAC) webpage link with the objective of helping U.S. persons comply with the reporting requirements of the antiboycott regulations set forth in Part 760 of the Export Administration Regulations (EAR), 15 CFR Parts 730-774.
The countries included on the boycott requestor list are:
- Bangladesh
- Malaysia
- Saudi Arabia
- Qatar
- United Arab Emirates
- Oman
- Kuwait
- Bahrain
- Norway
- India
- Pakistan
- Japan
- Algeria
- Afghanistan
- Singapore
- Brazil
- Hong Kong
- United Kingdom
- Turkey
- Iraq
- Switzerland
- Libyan Arab Jamahirya
https://www.bis.gov/press-release/bis-updates-boycott-requester-list and
https://www.bis.gov/sites/default/files/files/OAC%20Requester%20List%20June%202024.pdf
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U.S. Census Bureau
Tips on How to Resolve AES Response Messages
June 20, 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: 123
Narrative: Conveyance Name Missing
Severity: Fatal
Reason: The Conveyance Name/Carrier Name is missing when the Mode of Transportation is one that requires the Conveyance Name/Carrier Name to be reported.
Resolution: The name of the transport conveyance must be reported on an EEI for the major modes of transportation (i.e., vessel, air, rail, truck). For Vessel shipments, report the name of the vessel; for Air, Rail, or Truck shipments report the carrier name.
Verify the Mode of Transportation and the Conveyance Name/Carrier Name, correct the shipment and resubmit.
Fatal Error Response Code: 138
Narrative: Port of Unlading Missing
Severity: Fatal
Reason: The Port of Unlading Code is missing. All vessel shipments, and any air shipments between the United States and Puerto Rico must provide a Port of Unlading Code.
Resolution: The Port of Unlading Code is the foreign port where the exported merchandise is unloaded from the exporting carrier. Report a valid Port of Unlading Code for all vessel shipments, and any air shipments between the United States and Puerto Rico.
Verify the Port of Unlading Code, correct the shipment and resubmit.
It is important that AES filers correct Fatal Errors as soon as they are received in order to comply with the Foreign Trade Regulations. These errors must be corrected prior to export for shipments filed predeparture and as soon as possible for shipments filed postdeparture but not later than five calendar days after departure.
| LICENSING TIPS |
Department of State licensing:
- DDTC policy - Letters of Intent may not exceed $2Million dollars
- DDTC Policy - Limited Defense Service licensing is generally limited to 6 months
- DDTC licensing - The ultimate end platform must be specified in the specific purpose block. You must identify exactly where the item being exported or reexported will ultimately be used
- Do not use the Government of XXXXX, as the end user, you must list the specific government agencies, i.e. Ministry of Defense
Department of Commerce licensing:
- 748P applications for firearm-related transactions
- Purchase order dated within one year of submission for license applications to destinations outside of Country Group A: 1,
- Passport or other national identity card information for applications to export or reexport to individual end users (natural persons) outside of Country Group A:1.
- Import certificate or import permit from the ultimate destination, if that destination requires one, per Section 748.12.
| LATEST SANCTIONS FINES & PENALTIES |
This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.
Fines and Penalties
June 3, 2024: the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $44,750 against Airbus DS Government Solutions Inc. (ADSGS), a satellite communications and networking systems company located in Plano, Texas, to resolve three violations of the antiboycott provisions of the Export Administration Regulations (EAR), as alleged in BIS’s Proposed Charging Letter. ADSGS voluntarily self-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, all of which resulted in a significant reduction in penalty.
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June 12, 2024: An indictment was returned on June 11, 2024 in the District of Alaska charging Sergey Nefedov, 40, of Anchorage, Alaska, and Mark Shumovich, 35, of Bellevue, Washington, with allegedly operating a scheme to illegally export nearly half a million dollars’ worth of snowmachines and associated parts from the United States to Russia without the required licenses and approvals, in violation of U.S. export laws. Nefedov and Shumovich were arrested yesterday morning in Alaska and Washington, respectively.
Authorities seized all snowmachines related to this case. Nefedov and Shumovich are charged with the following offenses, which carry associated maximum penalties as follows: conspiracy to unlawfully export goods from the U.S. and defraud the U.S. (5 years in prison); false electronic export information activities (5 years in prison); smuggling (10 years in prison); unlawful export without a license in violation of the Export Control Reform Act (20 years in prison); and conspiracy to commit international money laundering (20 years in prison). Nefedov is also charged with money laundering and making a false statement in violation of the Export Control Reform Act of 2018, which both carry maximum penalties of 20 years in prison. The defendants face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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June 13, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of $285,000 against Sapphire Havacilik San Ltd. STI (Sapphire), an aviation company headquartered in Ankara, Türkiye, to resolve violations of the Export Control Reform Act of 2018 (ECRA) alleged in BIS’s Proposed Charging Letter. As described in the Settlement Agreement and Proposed Charging Letter, in October 2023 and in January 2024, Sapphire flew private charter flights involving a U.S.-origin Gulfstream aircraft into Russia without a required BIS license.
The U.S. Department of Commerce, through BIS, responded to the Russian Federation’s further invasion of Ukraine by implementing a sweeping series of stringent export controls that severely restrict Russia’s access to technologies and other items, including luxury goods. As part of those controls, effective February 24, 2022, BIS imposed expansive controls on aviation-related items to Russia, including a license requirement for the export, reexport, or transfer (in-country) to Russia of any aircraft or aircraft parts specified under any export control classification number.
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June 17, 2024: The Department of Commerce’s Bureau of Industry and Security (BIS) has imposed a three-year denial order against USGoBuy LLC of Portland, Oregon, prohibiting USGoBuy from participating in all exports under BIS jurisdiction from the United States. BIS activated this denial order—originally included as a suspended penalty pursuant to a 2021 settlement agreement with USGoBuy that resolved previous alleged violations of the Export Administration Regulations (EAR)—due to USGoBuy’s continued violations of the EAR and failure to address its past compliance failures.
USGoBuy is a package forwarding company that allows non-U.S.-based customers to purchase items online from U.S. retailers and have those items shipped to the company’s warehouse in Oregon. USGoBuy then consolidates and re-packages the items for export from the United States.
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June 17, 2024: 89 Fed. Reg. 51302: the Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Alexey Sumchenko (“Sumchenko”), Anna Shumakova (“Shumakova”), Branimir Salevic (“Branimir”), Danijela Salevic (“Danijela”); SkyTechnic, Skywind International Limited (“Skywind”), Hong Fan International (“Hong Fan”), Lufeng Limited (“Lufeng”), Unical dis Ticaret Ve Lojistik LSC (“Unical”), and Izzi Cup DOO (“Izzi Cup”) (collectively, the “Respondents”).
OEE's request and related information indicate that these parties are located in the Russian Federation, Hong Kong, the British Virgin Islands, Turkey, Serbia, and Indonesia at the respective addresses listed on the caption page of this order. OEE's request and related information further indicates that SkyTechnic, a Russian aircraft parts supplier, has developed and continues to utilize a network of Hong Kong-based shell companies, including Skywind, Hong Fan, and Lufeng, to obtain civil aircraft parts from the United States and obfuscate the ultimate end users of those parts in Russia, contrary to the requirements of the Export Administration Regulations.
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June 17, 2024: 89 Fed. Reg 51305: The Bureau of Industry and Security (“BIS”), U.S. Department of Commerce, through its Office of Export Enforcement (“OEE”), has requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of: Turboshaft FZE (“Turboshaft”), Treetops Aviation (“Treetops”), Black Metal FZE (“Black Metal”), Timur Badr, and Elaine Balingit (collectively, the “Respondents”). OEE's request and related information indicate that the parties are located in the United Arab Emirates (“UAE”), at the respective addresses listed on the caption page of this order, and that Badr, a Russian national, owns or controls Turboshaft FZE and Treetops Aviation.
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June 20,2024: A Fort Smith, Arkansas man, Neil Ravi Mehta, age 32, was sentenced to 57 months in federal prison followed by three years of supervised release and ordered to pay $659,825.52 in restitution, on one count of Possession of an Unregistered Firearm that was a Destructive Device, one count of Fraud and False Statements related to Tax Returns, and one count of False Declaration Before a Court.
In a separate case, Federal Armament LLC, which was owned by Neil Ravi Mehta, was sentenced to five years of probation and ordered to pay a fine of $500,000.00 on one count of Unlawfully Importation and Receipt of Firearms and one count of Filing False or Misleading Electronic Export Information. Federal Armament LLC was also ordered to forfeit the illegally imported firearms.
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June 24, 2024: As part of a settlement agreement, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an order imposing an administrative penalty on Indiana University (IU) related to exports by IU’s Bloomington Drosophila Stock Center (BDSC).
This settlement resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding 42 violations related to the export of fruit flies genetically modified to produce a subunit of a controlled toxin. These exports went to numerous research institutions and universities worldwide without the required export licenses. IU voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement (OEE), and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty.
https://www.bis.gov/press-release/bis-settles-alleged-export-control-violations-indiana-university and
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Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls
June 18, 2024: 89 Fed. Reg. 51644: The Department of Commerce's Bureau of Industry and Security (BIS) made changes to the Russia and Belarus sanctions under the Export Administration Regulations (EAR). This final rule imposes additional export control measures against Russia and Belarus by expanding the scope of items identified under two EAR supplements that are subject to the EAR's Russian and Belarusian industry sector sanctions; imposing a “software” license requirement for certain EAR99-designated “software” when destined to or within Russia or Belarus; and narrowing the scope of commodities and software that may be authorized for export, reexport, or transfer (in-country) to or within Russia or Belarus under License Exception Consumer Communications Devices (CCD).
To promote clarity and facilitate compliance, this final rule also consolidates the EAR's Russian and Belarus sanctions into a single section, while maintaining the existing related regulatory supplements identifying items that are subject to certain of those sanctions. This final rule also amends the EAR by adding five entities and eight addresses to the Entity List and making changes to the Entity List structure. These entries are listed on the Entity List under the destinations of the People's Republic of China (China) and Russia and have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. Lastly, this final rule makes two additional revisions to the EAR: one to confirm the criteria used when revising, suspending, or revoking EAR license exceptions and one revision to clarify the control status of fasteners for purposes of the EAR's Russian and Belarusian industry sector sanctions.
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June 20, 2024: The Department of Commerce's Bureau of Industry and Security (BIS) announced a Final Determination prohibiting Kaspersky Lab, Inc., the U.S. subsidiary of a Russia-based anti-virus software and cybersecurity company, from directly or indirectly providing anti-virus software and cybersecurity products or services in the United States or to U.S. persons. The prohibition also applies to Kaspersky Lab, Inc.’s affiliates, subsidiaries and parent companies (together with Kaspersky Lab, Inc., “Kaspersky”).
This action is the first of its kind and is the first Final Determination issued by BIS’s Office of Information and Communications Technology and Services (OICTS), whose mission is to investigate whether certain information and communications technology or services transactions in the United States pose an undue or unacceptable national security risk. Kaspersky will generally no longer be able to, among other activities, sell its software within the United States or provide updates to software already in use. The full list of prohibited transactions can be found at oicts.bis.gov/kaspersky.
In addition to this action, BIS added three entities—AO Kaspersky Lab and OOO Kaspersky Group (Russia), and Kaspersky Labs Limited (United Kingdom)—to the Entity List for their cooperation with Russian military and intelligence authorities in support of the Russian Government’s cyber intelligence objectives.
This Final Determination and Entity Listing are the result of a lengthy and thorough investigation, which found that the company’s continued operations in the United States presented a national security risk—due to the Russian Government’s offensive cyber capabilities and capacity to influence or direct Kaspersky’s operations—that could not be addressed through mitigation measures short of a total prohibition.
Individuals and businesses that utilize Kaspersky software are strongly encouraged to expeditiously transition to new vendors to limit exposure of personal or other sensitive data to malign actors due to a potential lack of cybersecurity coverage. Individuals and businesses that continue to use existing Kaspersky products and services will not face legal penalties under the Final Determination. However, any individual or business that continues to use Kaspersky products and services assumes all the cybersecurity and associated risks of doing so.
In order to minimize disruption to U.S. consumers and businesses and to give them time to find suitable alternatives, the Department’s determination will allow Kaspersky to continue certain operations in the United States—including providing anti-virus signature updates and codebase updates—until 12:00AM Eastern Daylight Time (EDT) on September 29, 2024.
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June 24, 2024: 89 Fed. Reg. 52362: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 3 entries to the Entity List, under the destinations of Russia (2), and the United Kingdom (1). These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States.
The following entries have been added to the Entity List:
Russia
- AO Kaspersky Lab; and
- OOO Kaspersky Group.
United Kingdom
- Kaspersky Labs Limited.
https://www.federalregister.gov/documents/2024/06/24/2024-13695/additions-to-the-entity-list
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
Syrian Sanctions Regulations
June 6, 2024: 89 Fed. Reg. 2024: The Department of the Treasury's Office of Foreign Assets Control (OFAC) adopted a final rule amending the Syrian Sanctions Regulations to, among other things, implement the relevant provisions of a May 1, 2012 Executive Order regarding foreign sanctions evaders with respect to Syria and Iran, and certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Countering America's Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. In addition to new prohibitions, OFAC is adding several relevant definitions and interpretations and one new general license. OFAC is also incorporating, with amendments, one general license, which has until now appeared only on OFAC's website, and updating six general licenses.
OFAC also issued a new Syria Frequently Asked Question (FAQ 1180)
FAQ 1180:
Question: What changes did OFAC make in the June 5, 2024 regulatory amendments to the Syrian Sanctions Regulations, 31 CFR part 542 (SySR)?
Answer: On June 5, 2024, OFAC, in consultation with the Department of State, amended the SySR to, among other things, incorporate certain sanctions statutes, including the Caesar Syria Civilian Protection Act of 2019, which are designed to deny the Assad Regime the resources it needs to support its longstanding campaign of repression against the Syrian people. The amendments also incorporate a web General License (GL) and modify certain existing GLs to facilitate the continued provision of legitimate humanitarian assistance and internet-based communications services to civilians in Syria and clarify the applicability of the SySR to persons sanctioned under certain sanctions authorities. These changes include:
- Incorporation of Executive order and sanctions statutes: OFAC incorporated into the SySR the Caesar Syria Civilian Protection Act of 2019, the Syria Human Rights Accountability Act of 2012, and the Iran Threat Reduction and Syria Human Rights Act of 2012, as well as relevant provisions of the Countering America’s Adversaries Through Sanctions Act and Executive Order (E.O.) 13608.
- Incorporation of web GL 22 related to economic sectors in certain areas of Syria: OFAC incorporated into the SySR, at new § 542.533, web GL 22, which authorizes activities in certain economic sectors in non-regime held areas of Northeast and Northwest Syria.
- Additional non-governmental organization (NGO) activities: OFAC amended the GL related to the activities of nongovernmental organizations (NGO) at § 542.516. These changes clarify which types of persons are covered by the NGO GL; add new authorized activities; and clarify that U.S. financial institutions may rely on statements of the originator of a funds, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with the NGO GL.
- Additional international organizations (IO): OFAC amended the GL related to the activities of international organizations (IO) at § 542.513. These changes add new IOs whose official business is authorized by the GL to include the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies; and The Global Fund to Fight AIDS, Tuberculosis, and Malaria, and Gavi, the Vaccine Alliance.
- Expansion of authorization for internet-based communications: OFAC amended the GL related to internet-based communications at § 542.511. These changes update the list of examples of communications technologies that are incident to, or enable services incident to, communications over the internet; authorize the provision of services incident to the export or reexport of certain communications software or hardware not subject to the Export Administration Regulations (“EAR”), 15 C.F.R. parts 730-774, that is incident to, or enables services incident to, communications over the internet, subject to certain conditions; and authorize the exportation and re-exportation to Syria of non-commercial-grade internet connectivity services
https://www.federalregister.gov/documents/2024/06/06/2024-12317/syrian-sanctions-regulations and
https://ofac.treasury.gov/media/932916/download?inline and
https://ofac.treasury.gov/media/932911/download?inline
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June 6, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization (Los Lobos) and its leader Wilmer Geovanny Chavarria Barre (also known as “Pipo”). Numbering thousands of members, Los Lobos has emerged as Ecuador’s largest drug trafficking organization and contributes significantly to the violence gripping the country. This action builds on Treasury’s February 7 designation of Los Choneros a prominent Ecuadorian drug gang—and comes as Ecuadorian criminal organizations backed by Mexico’s Cartel Jalisco Nueva Generación (CJNG) and Sinaloa Cartel continue to drive violence and instability in Ecuador.
The following individual has been added to OFAC’s SDN List:
- Chavarria Barre, Wilmer Geovanny of Ecuador.
The following entity has been added to OFAC’s SDN List:
- Los Lobos Drug Trafficking Organization of Ecuador.
https://home.treasury.gov/news/press-releases/jy2394 and
https://home.treasury.gov/news/press-releases?page=2
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June 6, 2024: In response to the Department of State’s sanction on “Lions’ Den” a militant Palestinian group centered in Nablus’s Old City in the West Bank, Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following entities to its SDN List:
- Al Jil Alqadem General Trading L.L.C. of the United Arab Emirates;
- Al Zumoroud and Al Yaqoot Gold and Jewllers Trading L.L.C of the United Arab Emirates;
- Capital Tap General Trading L.L.C. of the United Arab Emirates;
- Capital Tap Holding L.L.C. of the United Arab Emirates;
- Capital Tap Management and Consultancies L.L.C of the United Arab Emirates:
- Creative Python L.L.C. of the United Arab Emirates;
- Horizon Advanced Solutions General Trading – Sole Proprietorship L.L.C. of the United Arab Emirates; and
- Lions’ Den of the West Bank.
https://ofac.treasury.gov/recent-actions/20240606
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June 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned ten individuals, entities, and vessels, including tanker captains, in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal. This action targets maritime shipping and financial facilitators, several vessel managers and owners, and a company involved in forging shipping documents. This action, the seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023, underscores the U.S. government’s commitment to isolating and disrupting the financing of international terrorist groups such as the Houthis.
The following individuals have been added to OFAC’s SDN List:
- Al-Jamal, Abdallah Najib Ahmad of Yemen;
- Aruldhas, John Britto of the United Arab Emirates;
- Choudhary, Sandeep Singh of India; and
- Pandey, Vivek Ashok of India.
The following entities have been added to OFAC’s SDN List:
- Lainey Shipping Limited of China;
- Louis Marine Shipholding Enterprises S.A. of Turkey;
- Rayyan Shipping Private Limited of India;
- Shark International Shipping L.L.C. of the United Arab Emirates.
The following vessels have been added to OFAC’s SDN List:
- Bella 1, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9230880; and
- Janet, Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9220952.
https://ofac.treasury.gov/recent-actions/20240610 and
https://ofac.treasury.gov/recent-actions?page=0
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June 11, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed (Nazar) and his son, Azruddin Mohamed (Azruddin), their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas (Thomas), for their roles in public corruption in Guyana.Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned 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.
The following individuals have been added to OFAC’s SDN List:
- Mohamed, Azruddin Intiaz of Guyana;
- Mohammed, Nazar of Guyana;
- Thomas, Mae Toussaint of Guyana.
The following entities have been added to OFAC’s SDN List:
- Hadi’s World Incorporated of Guyana;
- Mohamed’s Enterprise of Guyana;
- Team Mohamed’s Racing Team.
https://ofac.treasury.gov/recent-actions/20240611 and
https://ofac.treasury.gov/recent-actions?page=0
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June 12, 2024: As President Biden and Group of Seven (G7) Leaders met in Italy, the U.S. Department of the Treasury issued sweeping new measures guided by G7 commitments to intensify the pressure on Russia for its continued cruel and unprovoked war against Ukraine. These actions ratchet up the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy; restrict the ability of Russian military-industrial base to take advantage of certain U.S. software and information technology (IT) services; and, together with the Department of State, target more than 300 individuals and entities both in Russia and outside its borders including in Asia, the Middle East, Europe, Africa, Central Asia, and the Caribbean whose products and services enable Russia to sustain its war effort and evade sanctions.
Treasury targeted the architecture of Russia’s financial system, which has been reoriented to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine. Treasury also targeted more than a dozen transnational networks laundering gold for a designated Russian gold producer, supporting Russia’s production of unmanned aerial vehicles (UAVs), and procuring sensitive and critical items such as materials for Russia’s chemical and biological weapons program, anti-UAV equipment, machine tools, industrial machinery, and microelectronics. This action also takes further steps to limit Russia’s future revenue from liquefied natural gas.
The State Department targeted over 100 entities and individuals engaged in the development of Russia’s future energy, metals, and mining production and export capacity; sanctions evasion and circumvention; and furthering Russia’s ability to wage its war against Ukraine.
OFAC also issued Russia-related General License 6D, 8J, 25D, 98, 99, and 100.
General License No. 6D: All transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, related to:
(1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices;
(2) the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19); or (3) clinical trials and other medical research activities are authorized.
For the purposes of this general license, agricultural commodities, medicine, and medical devices are defined as follows:
(1) Agricultural commodities. For the purposes of this general license, agricultural commodities are products that fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as:
- Food for humans (including raw, processed, and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled drinking water) or animals (including animal feeds);
- (ii) Seeds for food crops;
- (iii) Fertilizers or organic fertilizers; or
- (iv) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.
(2) Medicine. For the purposes of this general license, medicine is an item that falls within the definition of the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
(3) Medical devices. For the purposes of this general license, a medical device is an item that falls within the definition of “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
This general license does not authorize:
(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; or
(3) Transactions prohibited by E.O. 14066, E.O. 14068, or E.O. 14071, except for transactions prohibited by the determination of May 8, 2022, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services,” or the determination of June 12, 2024, made pursuant to section 1(a)(ii) of E.O. 14071, “Prohibition on Certain Information Technology and Software Services.”
Effective June 12, 2024, General License No. 6C, dated January 17, 2023, is replaced and superseded in its entirety by this General License No. 6D
General License No. 8J:
All transactions prohibited by Executive Order (E.O.) 14024 involving one or more of the following entities that are related to energy are authorized, through 12:01 a.m. eastern daylight time, November 1, 2024:
(1) State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;
(2) Public Joint Stock Company Bank Financial Corporation Otkritie;
(3) Sovcombank Open Joint Stock Company;
(4) Public Joint Stock Company Sberbank of Russia;
(5) VTB Bank Public Joint Stock Company;
(6) Joint Stock Company Alfa-Bank;
(7) Public Joint Stock Company Rosbank;
(8) Bank Zenit Public Joint Stock Company;
(9) Bank Saint-Petersburg Public Joint Stock Company;
(10) National Clearing Center (NCC);
(11) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
(12) the Central Bank of the Russian Federation.
For the purposes of this general license, the term “related to energy” means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.
This general license does not authorize:
(1) Any transactions prohibited by Directive 1A under E.O. 14024, Prohibitions Related to Certain Sovereign Debt of the Russian Federation;
(2) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(3) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation; or
(4) Any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
Effective June 12, 2024, General License No. 8I, dated April 29, 2024, is replaced and superseded in its entirety by this General License No. 8J.
General License No. 25D:
All transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation that are prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), are authorized.
The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to the Russian Federation of services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, user authentication services, web hosting, and domain name registration services, that is prohibited by the RuHSR, is authorized.
The exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, to the Russian Federation of software, hardware, or technology incident to the exchange of communications over the internet is authorized, provided that:
- If the software, hardware, or technology is subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology is licensed or otherwise authorized by the Department of Commerce pursuant to the EAR; and
- (ii) If the software, hardware, or technology is not subject to the EAR, the exportation, reexportation, sale, or supply to the Russian Federation of such software, hardware, or technology would be eligible for a license exception or otherwise authorized by the Department of Commerce if it were subject to the EAR.
This general license does not authorize:
(1) The opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under Executive Order (E.O.) 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation;
(3) Any transactions prohibited by E.O. 14066 or E.O. 14068; or
(4) Any transactions involving Joint Stock Company Channel One Russia, Joint Stock Company NTV Broadcasting Company, Television Station Russia-1, Limited Liability Company Algoritm, New Eastern Outlook, Oriental Review, or Garantex Europe OU, unless separately authorized.
Effective June 12, 2024, General License No. 25C, dated July 14, 2022, is replaced and superseded in its entirety by this General License No. 25D.
General License No. 98:
All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, July 27, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) Aviatech FZC
(2) Beijing Deepcool Industries Co., Ltd.
(3) Guangdong Pratic CNC Technology Co., Ltd.
(4) Joint Stock Company Uralredmet (5) Joint Stock Company Goznak
(5) Joint Stock Company Goznak
(6) Limited Liability Company Elga Stroy Mining Services
(7) Limited Liability Company Elgaugol
(8) Limited Liability Company Management Company Elga
(9) Limited Liability Company Koulstar
(10) Max Jet Service Limited Liability Company
(11) Mile Hao Xiang Technology Co., Ltd.
(12) Platin Group Machine Manufacturing International Company Limited
(13) Public Joint Stock Company Seligdar
(14) Shandong Oree Laser Technology Co., Ltd.
(15) Wuhan Tianyu Information Industry Co., Ltd; or
(16) Any entity in which one or more one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
(b) This general license does not authorize:
(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any transactions prohibited by Directive 4 under E.O. 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; or
(3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
General License No. 99:
All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR):
(1) Moscow Exchange (MOEX);
(2) National Clearing Center (NCC);
(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and
(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by any of the blocked entities identified in paragraph (a) (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 2024:
All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern daylight time, June 12, 2024 are authorized through 12:01 a.m. eastern daylight time, August 13, 2024, 2024.
All transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern daylight time June 12, 2024 that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern daylight time August 13, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
This general license does not authorize:
(1) U.S. persons to sell, or to facilitate the sale of, Covered Debt or Equity to, directly or indirectly, any person whose property and interests in property are blocked; or
(2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, Covered Debt or Equity, other than purchases of or investments in Covered Debt or Equity ordinarily incident and necessary to the divestment or transfer of Covered Debt or Equity as described in paragraph (b) of this general license.
This general license does not authorize:
(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any transactions prohibited by Directive 4 under E.O. 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; or
(3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
General License No. 100:
All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment of debt or equity to a non-U.S. person, who is not a person whose property or interests in property are blocked, or the conversion of currencies, involving one or more of the following blocked entities that is acting solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market, are authorized through 12:01 eastern daylight time August 13, 2024:
(1) Moscow Exchange (MOEX);
(2) National Clearing Center (NCC);
(3) Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD); and
(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
This general license does not authorize:
(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any transactions prohibited by Directive 4 under E.O. 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; or (3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
Additionally, OFAC is issuing eight new, Russia-related Frequently Asked Questions (FAQs 1181 - 1188)
FAQ 1181:
Question: Effective June 12, 2024, how is Treasury interpreting Russia’s military-industrial base under section 11 of Executive Order (E.O.) 14024, as amended by E.O. 14114?
Answer: In line with G7 commitments and in response to the Government of the Russian Federation’s continued efforts to reorient its economy and government resources to support its war effort, Treasury has updated its definition of Russia’s military-industrial base to include all persons blocked pursuant to E.O. 14024. This updated definition reflects Russia’s reorientation of its economy and government resources to support its war. This action means that FFIs risk being sanctioned for conducting or facilitating any significant transaction or transactions or for providing any service involving a person blocked pursuant to E.O. 14024.
As updated in FAQ 1151, Russia’s military-industrial base includes all persons blocked pursuant to E.O. 14024, as well as any person operating in the technology, defense and related materiel, construction, aerospace, and manufacturing sectors of the Russian Federation economy (and other sectors as may be determined pursuant to E.O. 14024). For definitions of those identified sectors, see FAQ 1126. Russia’s military-industrial base may also include individuals and entities that support the sale, supply, or transfer, directly or indirectly, of critical items identified pursuant to subsection 11(a)(ii) of E.O. 14024 to the Russian Federation. See determination of December 22, 2023 pursuant to subsection 11(a)(ii) of Executive Order 14024 (Russia Critical Items Determination)
FAQ 1182:
Question: Are foreign financial institutions (FFIs) subject to sanctions risk for providing all financial services involving persons blocked pursuant to Executive Order (E.O.) 14024, as amended? What about agricultural, medical, and other transactions authorized by OFAC General Licenses?
Answer: Treasury remains focused on counteracting activity that involves sanctions evasion or third-country support to Russia’s military-industrial base. At the same time, legitimate humanitarian activity and agricultural and medical trade are not the target of our sanctions. Accordingly, FFIs may continue to conduct or facilitate any transaction(s) or provide any service related to activities that are otherwise authorized or exempted under the Russian Harmful Foreign Activities Sanctions program.
Foreign persons do not risk the imposition of sanctions for engaging in transactions authorized for U.S. persons under General Licenses issued under the Russian Harmful Foreign Activities Sanctions program.
FFIs may continue to rely on Treasury’s existing authorizations in place for transactions related to agricultural commodities, medicine, medical devices and related replacement parts, components, or software updates, the Coronavirus Disease 2019 (General License (GL) 6D), energy-related transactions (GL 8J), certain transactions in support of non-governmental organizations (GL 27), official business of third-country diplomatic or consular missions located in the Russian Federation (GL 20), certain transactions and official business of certain international organizations and entities by employees, grantees, or contractors thereof (31 CFR 587.510). Additionally, the importation or exportation of information or informational materials and transactions ordinarily incident to travel to or from any country are exempt under the International Emergency Economic Powers Act (IEEPA).
FAQ 1183:
Question: What authorizations are in place with respect to the Moscow Exchange (MOEX), National Clearing Center (NCC), and Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD)?
Answer: On June 12, 2024, OFAC issued Russia-related general licenses (GLs) GL 99, GL 100, and amended GL 8J, authorizing certain transactions involving MOEX, NCC, NSD, or any entity in which one of these entities owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (collectively, “the Blocked Entities”).
GL 99 authorizes the wind down of transactions involving the Blocked Entities, as well as certain transactions related to the divestment to non-U.S. persons of debt or equity issued or guaranteed by, or derivative contracts involving, the Blocked Entities. For example, GL 99 would authorize a U.S. person to divest their equity in MOEX to a non-blocked non-U.S. person. This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024. See GL 99 for more information.
GL 100 authorizes certain transactions for the divestment to non-blocked, non-U.S. persons of debt or equity, or for the conversion of currencies, involving one or more of the Blocked Entities solely as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market. GL 100 is intended to cover the divestment of debt or equity of non-blocked companies that may be traded on or through one of the Blocked Entities in their capacity as a securities, trade, or settlement depository, central counterparty or clearing house, or public trading market. For example, GL 100 would authorize a U.S. person to divest their equity in a non-blocked Russian company that is being traded on MOEX to a non-blocked, non-U.S. person. This example would be distinct from the divestment of equity in MOEX itself, which would be covered by GL 99. GL 100 would also authorize U.S. persons to transact with one of the Blocked Entities to the extent ordinarily incident and necessary to convert U.S. dollars to another currency, or vice versa. This authorization expires at 12:01 a.m. eastern daylight time August 12, 2024. See GL 100 for more information.
FAQ 1184:
Question: What action did Treasury take on June 12, 2024 with regards to prohibiting certain information technology (IT) and software-related services?
Answer: In line with G7 efforts to disrupt Russia’s defense industry’s reliance on western IT systems, on June 12, 2024, Treasury issued a determination that restricts the provision of certain IT and software-related services to Russia. The determination, “Prohibition on Certain Information Technology and Software Services,” issued pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”), prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, to any person located in the Russian Federation of: (1) IT consultancy and design services; and (2) IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software (collectively, “Covered Software”). The IT and Software Services Determination will take effect at 12:01 a.m. eastern daylight time on September 12, 2024. See FAQs 1185, 1186, 1187, and 1188 for additional information.
The aim of this action is not to prohibit all activity relating to the provision of IT and software-related services to Russia. The United States strongly supports the free flow of information and communications globally as facilitated by telecommunications and the internet. These measures do not prohibit internet access or the delivery of internet-based communications services. Treasury already has in place General License (GL) 25D, which authorizes certain transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet, subject to certain restrictions. For additional information, see FAQ 1040. Treasury has also amended GL 6D to authorize transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services. Additionally, the importation from any country, or the exportation to any country of any information or informational materials, regardless of format or medium, is generally exempt from the scope of sanctions prohibitions under the International Emergency Economic Powers Act. See 50. U.S.C. § 1702(b)(3).
In addition, the IT and Software Services Determination does not prohibit the following IT and software services, which are excluded from its scope: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person; and (3) any service for software that would be eligible for a license exception or otherwise authorized for export or reexport to Russia by the Department of Commerce.
FAQ 1185:
Question: What activities are considered prohibited “information technology (IT) consultancy and design services” under the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O. 14071) (the “IT and Software Services Determination”)?
Answer: IT consultancy and design services include the development and implementation of software, as well as assistance or advice relating to the development and implementation of software, including the supply and installation of bespoke software. However, the retail sale of off-the-shelf software, falling under United Nations’ Central Product Classification (CPC) Code 63252, is not included in the scope of IT consultancy and design services. IT consultancy and design services are distinct from information technology (IT) support services, which fall under United Nations’ CPC Code 83132. See FAQ 1187 for more information on how OFAC intends to define “IT consultancy and design services.” See FAQ 1186 for a description of prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software.
The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):
- A U.S. company signs a contract with a Russian company to assist the Russian company in upgrading its IT systems. The U.S. consulting company advises on, among other matters, the kinds of software and hardware needed for the Russian company’s operations and how best to
procure such technology.
- A U.S. company works to modify existing web applications to be functional within a Russian company’s internal IT environment.
- A U.S. service provider signs a contract with a Russian company for the design and engineering of bespoke (i.e., custom-made) software that the Russian company uses for internal purposes.
- A U.S. person working at a third country company signs a contract with a Russian company to design the structure of their sales website.
The following are examples of activities that would not be prohibited by the IT and Software Services Determination:
- A U.S. service provider provides a Russian company with internet access.
- A U.S. service provider provides a Russian company with internet services. The delivery of internet services includes, for example, Domain Name Services.
- A U.S. company provides Russian individuals and entities with continued access to cloud-based, free-of-charge, publicly available web applications, such as email, spreadsheet, and document applications.
- A U.S. company provides virtual private network (VPN) services to customers in the Russian Federation.
Some of these activities – such as the sale of off-the-shelf software – may be subject to other Federal laws or requirements of other Federal agencies, including export, reexport, and transfer (in-country) license requirements maintained by the Department of Commerce’s Bureau of Industry and Security under the Export Administration Regulations, 15 CFR parts 730–774 (EAR).
FAQ 1186:
Question: What activities are considered prohibited “IT support services” and “cloud-based services” for enterprise management software and design and manufacturing software (collectively “Covered Software”) under the determination, “Prohibition on Certain Information Technology and Software Services”, pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”)?
Answer: The IT and Software Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of both IT support services and cloud-based services for the Covered Software to a person located in the Russian Federation. IT support services include the provision of technical expertise to solve problems for the client in using software, hardware, or an entire computer system. Cloud-based services include the supply of software and associated services via the internet or the cloud, including through Software-as-a-Service (SaaS). See FAQ 1187 for more information on how OFAC intends to define “enterprise management software,” “design and manufacturing software,” “cloud-based services,” and “information technology support services.”
The following are examples of activities that would be prohibited by the IT and Software Services Determination if such services were provided to a company located in the Russian Federation that is not owned or controlled directly or indirectly by a U.S. person (Russian company):
- A U.S. company sells a cloud-based enterprise resource planning software subscription to a Russian company.
- A U.S. employee of a third country company provides customer support services to a Russian company that is experiencing technical difficulties with its human resources software.
- A U.S. company provides a software patch to a Russian company to fix a bug in its computer-aided design software.
The following are examples of activities that would not be prohibited by the IT and Software Services Determination:
- A U.S. company sells a cloud-based electronic health records software subscription to a Russian company.
- A U.S. company provides customer support services to a Russian individual who is experiencing technical difficulties with their publicly available cloud-based spreadsheet web application.
- A U.S. person working at a third country company provides customer support services to a Russian individual who is experiencing technical difficulties with their free-of-charge publicly available teleconferencing application.
- A U.S. company provides IT support services to a Russian individual to a non-covered software application.
The IT and Software Services Determination complements regulations to be issued by the U.S. Department of Commerce Bureau of Industry and Security (BIS) pertaining to the export, reexport, or transfer (in-country) to the Russian Federation of the following types of software subject to the Export Administration Regulations, 15 CFR part 730–774 (EAR): Enterprise resource planning (ERP); customer relationship management (CRM); business intelligence (BI); supply chain management (SCM); enterprise data warehouse (EDW); computerized maintenance management system (CMMS); project management software, product lifecycle management (PLM); building information modelling (BIM); computer aided design (CAD); computer-aided manufacturing (CAM); and engineering to order (ETO).
See General License (GL) 25D for more information about certain authorizations for transactions relating to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet. See GL 6D for more information on authorizations for transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services.
FAQ 1187:
Question: How does OFAC intend to interpret the following terms in the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”): “enterprise management software,” “design and manufacturing software,” “cloud-based services,” “information technology support services,” and “information technology consultancy and design services”?
Answer: OFAC expects to promulgate regulations that define or interpret these terms as follows:
The term enterprise management software means the following types of software: enterprise resource planning (ERP), customer relationship management (CRM), business intelligence (BI), supply chain management (SCM), enterprise data warehouse (EDW), computerized maintenance management system (CMMS), project management, and product lifecycle management (PLM) software.
The term design and manufacturing software means the following types of software: building information modelling (BIM), computer aided design (CAD), computer-aided manufacturing (CAM), and engineer to order (ETO) software.
The term cloud-based services includes the delivery of software via the internet or over the cloud, including through Software-as-a-Service (SaaS), or SaaS cloud services in relation to such software.
The term information technology support services is defined consistent with the United Nations’ Central Product Classification (CPC) Code 83132 to include:
- providing technical expertise to solve problems for the client in using software, hardware, or an entire computer system, such as: (a) providing customer support in using or troubleshooting the software; (b) upgrading services and the provision of patches and updates; (c) providing customer support in using or troubleshooting the computer hardware, including testing and cleaning on a routine basis and repair of information technology (IT) equipment; (d) technical assistance in moving a client’s computer system to a new location; (e) providing customer support in using or troubleshooting the computer hardware and software in combination; and
- providing technical expertise to solve specialized problems for the client in using a computer system, such as: (a) auditing or assessing computer operations without providing advice or other follow-up action including auditing, assessing and documenting a server, network or process for components, capabilities, performance, or security; (b) data recovery services, i.e. retrieving a client’s data from a damaged or unstable hard drive or other storage medium, or providing standby computer equipment and duplicate software in a separate location to enable a client to relocate regular staff to resume and maintain routine computerized operations in event of a disaster such as a fire or flood; and (c) other IT technical support services not elsewhere classified.
The term information technology consultancy and design services includes both IT consulting services and IT design and development services for applications, and is defined consistent with United Nations’ Central Product Classification (CPC) Codes 83131 and 83141, respectively.
- IT consultancy services includes providing advice or expert opinion on technical matters related to the use of information technology, such as: (a) advice on matters such as hardware and software requirements and procurement; (b) systems integration; (c) systems security; and (d) provision of expert testimony on IT related issues.
- IT design and development services for applications includes services of designing the structure and/or writing the computer code necessary to create and/or implement a software application, such as: (a) designing the structure of a web page and/or writing the computer code necessary to create and implement a web page; (b) designing the structure and content of a database and/or writing the computer code necessary to create and implement a database; (c) designing the structure and writing the computer code necessary to design and develop a custom software application; (d) customization and integration, adapting (modifying, configuring, etc.) and installing an existing application so that it is functional within the clients’ information system environment.
FAQ 1188:
Question: Does the determination, “Prohibition on Certain Information Technology and Software Services,” pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”) prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation?
Answer: No, provided that the provision of services is not an indirect export to a person located in the Russian Federation. For the purposes of the IT and Software Services Determination, OFAC interprets the “indirect” provision of the prohibited services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”
In contrast, OFAC would not consider to be prohibited the provision of services to a third country company that is located outside of Russia, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.
For example, the following scenarios describe services that would be prohibited under the IT and Software Services Determination:
- A U.S. company designs and delivers proprietary supply chain management software to a third country limited liability company (Company X) on behalf of its Russian parent company, which Company X intends to supply to its parent company.
- A U.S. company designs and delivers proprietary accounting software to a third country software re-seller (Company Y), which Company Y indicates that they intend to supply to a Russian company.
- A U.S. consulting company signs a contract to provide enterprise management software and related information technology support services to Company X. Company X provides access to these services to its Russian parent, such that employees from the Russian parent call the U.S. consulting company when they have problems with their enterprise management software.
The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the IT and Software Services Determination:
- A U.S. software company assists a U.S. subsidiary of a Russian company in upgrading the U.S. subsidiary’s IT systems, including procuring new software and hardware. The U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.
- A U.S. software company signs a contract with the third-country subsidiary (Company Z) of a Russian company for the delivery via cloud of building information software to Company Z. This subsidiary has an office and employees in the third country and conducts business in this third country, and the software will not be provided to the Russian parent company.
- A U.S. technology company designs a website for the subsidiary of a Russian company located in a third country. This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.
OFAC is publishing an updated Compliance Advisory to Foreign Banks on Russia Sanctions Risks in order to provide additional guidance for Foreign Financial Institutions the update advisory warns foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC. OFAC is revising the definition of “Russia’s military-industrial base” to include all persons blocked under E.O. 14024, as amended.
Please see the full list of sanctioned Russian individuals and entities posted in the links below:
https://ofac.treasury.gov/recent-actions/20240612
https://home.treasury.gov/news/press-releases/jy2404
https://ofac.treasury.gov/media/932951/download?inline
https://ofac.treasury.gov/media/932921/download?inline
https://ofac.treasury.gov/media/932926/download?inline
https://ofac.treasury.gov/media/932931/download?inline
https://ofac.treasury.gov/media/932936/download?inline
https://ofac.treasury.gov/media/932941/download?inline
https://ofac.treasury.gov/media/932946/download?inline
https://ofac.treasury.gov/faqs/added/2024-06-12 and
https://ofac.treasury.gov/media/932436/download?inline
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June 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on four individuals with links to the Islamic State of Iraq and Syria (ISIS), including members of an ISIS-linked human smuggling network. The investigations into these targets, as well as their subsequent designations, were taken in close coordination with the Government of Türkiye. As a result of this close cooperation, the Government of Türkiye is concurrently taking its own domestic action against this network.
The following individuals have been added to OFAC’s SDN List:
- Ismailov, Olimkhon Makhmudjon Ugli of Uzbekistan;
- Khamirzaev, Adam of Turkey;
- Mirzoev, Muhammadyusuf Alisher Ogli of Uzbekistan: and
- Niyazov, Muhammad Ibrohimjon of Turkey.
https://ofac.treasury.gov/recent-actions/20240614 and
https://ofac.treasury.gov/recent-actions/20240617
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June 14, 2024: Based on the Department of State’s designation of Tzav 9, a violent extremist Israeli group that has been blocking, harassing, and damaging convoys carrying lifesaving humanitarian assistance to Palestinian civilians in Gaza, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the following individuals to its SDN List:
- Eklund, Leif Robert of Sweden;
- Oberg, Par of Sweden;
- Vejeland, Tor Frederik of Sweden.
The following entities have been added to OFAC’s SDN List:
- Nordic Resistance Movement of Sweden; and
- TZAV 9 of Israel.
https://ofac.treasury.gov/recent-actions/20240614 and
https://ofac.treasury.gov/recent-actions?page=0
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June 17, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities that have facilitated weapons procurement for Ansarallah, commonly referred to as the Houthis. OFAC is also designating one individual and one company, as well as identifying one vessel, that have facilitated the shipment of commodities, the sale of which provides an important funding stream to the Houthis that aids in their weapons procurement. This action targets key actors who have enabled the Houthis to generate revenue and acquire a range of materials to manufacture the advanced weaponry they are now using to conduct ongoing terrorist attacks against commercial ships. Since November 2023, the Houthis have deployed a range of unmanned aerial vehicles (UAVs), ballistic missiles, and cruise missiles to attack merchant vessels and their crews in the Red Sea and Gulf of Aden, killing innocent civilians, causing severe damage to commercial ships, and threatening global freedom of navigation.
The following individuals have been added to OFAC’s SDN List:
- Al-Haifi, Muaadh Ahmed Mohammed of Oman;
- Al-Sa’idi, Haydar Muzhir Ma’lak of Iraq;
- Al-Wazir, Ali Abd Al-Wahhab Muhammad of Yemen; and
- Salyga, Vyacheslav of Ukraine.
The following entities have been added to OFAC’s SDN List:
- Dongguan Yuze Machining Tools Company Limited of China;
- Guangzhou Tasneem Trading Company Limited of China;
- Harakat Ansar Allah Al-Awfiya of Iraq;
- International Smart Digital Interface Limited Liability Company of Oman;
- Ningbo Beilun Saige Machine Co., Ltd., No. 2 of China;
- Stellar Wave Marine L.L.C. of the United Arab Emirates; and
- Tasneem Trading Company Limited of China.
The following vessel has been added to OFAC’s SDN List:
- Otaria, rude Oil Tanker Cameroon flag; Vessel Registration Identification IMO 9192260.
https://ofac.treasury.gov/recent-actions/20240617 and
https://ofac.treasury.gov/recent-actions?page=0
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June 18, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of two individuals and seven entities that provide major sources of revenue for U.S.-designated Republika Srpska (RS) President Milorad Dodik (Dodik) and his family. Dodik has used his official position to accumulate personal wealth through companies linked to himself and to Igor Dodik (Igor). For example, in 2024, Igor and Dodik exercised their control over senior Bosnia and Herzegovina (BiH) government officials to manipulate the draft BiH state budget so that a state-level contract could be awarded to Prointer ITSS d.o.o. Banja Luka Clan Infinity International Group—an entity in the network—outside of the competitive process.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) published Balkans-Related General License 3A, 4, and 5.
General License 3A:
All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), involving one or more of the blocked entities described in this general license related to the following are authorized: (1) the production, manufacturing, sale, transport, or provision of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices; (2) the prevention, diagnosis, or treatment of any disease or medical condition; or (3) the conduct of clinical trials or other medical research.
The authorization this general license applies to the following blocked entities:
(1) Orka Holding AD;
(2) Infinity International Group d.o.o. Banja Luka;
(3) Sirius 2010 d.o.o. Banja Luka; or
(4) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
(c) 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 fall within the term “agricultural commodity” as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602) and are intended for use as:
- 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);
- Seeds for food crops;
- Fertilizers or organic fertilizers; or
- 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).
(d) This general license does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in paragraph (b) of this general license, unless separately authorized.
(e) Effective June 18, 2024, General License No. 3, dated November 16, 2023, is replaced and superseded in its entirety by this General License No. 3A.
General License 4:
All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), that are ordinarily incident and necessary to the wind down of any transaction involving one or more of the following blocked entities are authorized through 12:01 a.m. eastern daylight time, August 17, 2024, provided that any payment to a blocked person is made into a blocked account in accordance with the WBSR:
(1) Infinity International Group d.o.o. Banja Luka;
(2) Sirius 2010 d.o.o. Banja Luka; or
(3) Any entity in which one or more of the above persons own, directly or indirectly, individually or in aggregate, a 50 percent or greater interest.
This general license does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in this general license, unless separately authorized.
General License 5:
All transactions prohibited by the Western Balkans Stabilization Regulations, 31 CFR part 588 (WBSR), that are ordinarily incident and necessary to the manufacture, distribution, operation, installation, or maintenance and repair of pumps manufactured or distributed by Kaldera Company EL PGP d.o.o., or any entity in which Kaldera Company EL PGP d.o.o. owns, directly or indirectly, a 50 percent or greater interest, that are currently or are intended solely for use in the treatment or distribution of drinking water, are authorized.
This general license does not authorize any transactions otherwise prohibited by the WBSR, including transactions involving any person blocked pursuant to the WBSR other than the blocked persons described in this general license, unless separately authorized.
The following individuals have been added to OFAC’s SDN List:
- Cicic, Milenko of Bosnia and Herzegovina; and
- Djuric, Djordje of Serbia.
The following entities have been added to OFAC’s SDN List:
- Infinity International Group D.O.O. Banja Luka of Bosnia and Herzegovina;
- Infinity Media D.O.O of Bosnia and Herzegovina;
- K-2 Audio Services Banja Luka D.O.O. of Bosnia and Herzegovina;
- Kaldera Company El PGP D.O.O. of Bosnia and Herzegovina;
- Prointer ITSS D.O.O. Banja Luka Clan Infinity International Group of Bosnia and Herzegovina;
- Sirius 2010 D.O.O. Banja Luka of Bosina and Herzegovina; and
- UNA World Networdk D.O.O. of Bosnia and Herzegovina.
https://ofac.treasury.gov/recent-actions/20240618 and
https://ofac.treasury.gov/recent-actions?page=0
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June 20, 2024: Secretary Yellen announced that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned eight Mexico-based targets affiliated with La Nueva Familia Michoacana drug cartel for trafficking fentanyl, cocaine, and methamphetamine into the United States. In addition to narcotics trafficking, La Nueva Familia Michoacana smuggles migrants from Mexico into the United States. La Nueva Familia Michoacana is one of the most powerful and violent cartels in Mexico and has become a priority focus of the Mexican government in recent years.
Concurrently, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Supplemental Advisory to highlight critical new information to help U.S. banks and other financial institutions guard against activity associated with the illicit fentanyl supply chain. The advisory includes new trends and red flags that can be indicators of activity associated with the procurement of precursor chemicals and manufacturing equipment used for the synthesis of illicit fentanyl and other synthetic opioids. Reporting from financial institutions of suspected financial transactions involving illicit fentanyl and narcotics trafficking plays a key role in law enforcement investigations and Treasury’s sanctions efforts globally.
The following individuals have been added to OFAC’s SDN List:
- Arzate Gomez, Kevin of Mexico;
- Camacho Goicochea, Euclides of Mexico;
- Duran Alvarez, David of Mexico;
- Lopez Hernandez, Josue of Mexico;
- Maldonado Bustos, Rodolfo of Mexico;
- Ochoa Lagunes, Lucio of Mexico;
- Ramirez Carrera, Josue of Mexico;
- Tabares Martines, Uriel of Mexico.
https://ofac.treasury.gov/recent-actions/20240620 and
https://ofac.treasury.gov/recent-actions?page=0
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June 25, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nearly 50 entities and individuals that constitute multiple branches of a sprawling “shadow banking” network used by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) to gain illicit access to the international financial system and process the equivalent of billions of dollars since 2020. MODAFL and the IRGC engage in several commercial revenue-generating activities, most notably the sale of Iranian oil and petrochemicals.
Networks of Iranian exchange houses and dozens of foreign cover companies under their control enable MODAFL and the IRGC to disguise the revenue they generate abroad that is then available to use for a range of MODAFL and IRGC activities, including the procurement and development of advanced weapons systems such as unmanned aerial vehicles. This revenue also supports the provision of weapons and funding to Iran’s regional proxy groups, including Yemen’s Houthis, who continue a campaign of reckless attacks on global shipping, as well as the transfer of UAVs to Russia for use in its war of aggression against Ukraine.
The following individuals have been added to OFAC’s SDN list:
- Jalalian, Ramin of the United Arab Emirates;
- Mir Mohammed Ali, Seyyed Reza of Iran;
- Najibi, Seyyed Mohammad Mosanna’i of Turkey; and
- Nourian, Siavash of Iran.
The full list of sanctioned entities can be found at the posting below
https://ofac.treasury.gov/recent-actions/20240625 and
https://home.treasury.gov/news/press-releases/jy2431
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June 26, 2024: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced a $538,000 settlement with Mondo TV, S.p.a. ("Mondo"). Mondo, an Italy-based animation company, has agreed to settle its potential civil liability for 18 apparent violations of the North Korea Sanctions Regulations. Between May 2019 and November 2021, Mondo caused U.S. financial institutions to process approximately $537,939 in payments for animation work Mondo outsourced to a Government of North Korea-owned animation studio. This settlement amount reflects OFAC's determination that Mondo's conduct was non-egregious and not voluntarily disclosed.
https://ofac.treasury.gov/media/932986/download?inline and
https://ofac.treasury.gov/recent-actions/20240626
OFAC issued Russia-related General License 55B:
All transactions prohibited by the determination of November 21, 2022 made pursuant to section 1(a)(ii) of Executive Order 14071 (“Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin”) related to the maritime transport of crude oil originating from the Sakhalin-2 project (“Sakhalin-2 byproduct”) are authorized through 12:01 a.m. eastern daylight time, June 28, 2025, provided that the Sakhalin-2 byproduct is solely for importation into Japan.
This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.
Effective June 26, 2024, General License No. 55A, dated September 14, 2023, is replaced and superseded in its entirety by this General License No. 55B.
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