This newsletter is a listing of the latest changes in export control regulations through May 31, 2024. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and
persons denied export privileges by the United States Government.
REGULATORY UPDATES
President
President Biden Continued The National Emergency with Respect to the Actions of the Government of Syria
May 8, 2024: On May 11, 2004, pursuant to his authority under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) and the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 (Public Law 108-175), the President issued Executive Order 13338, in which he declared a national emergency with respect to the actions of the Government of Syria. The national emergency was modified in scope and relied upon for additional steps taken in Executive Order 13399 of April 25, 2006, Executive Order 13460 of February 13, 2008, Executive Order 13572 of April 29, 2011, Executive Order 13573 of May 18, 2011, Executive Order 13582 of August 17, 2011, Executive Order 13606 of April 22, 2012, and Executive Order 13608 of May 1, 2012.
The President took these actions to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the actions of the Government of Syria in supporting terrorism, maintaining its then-existing occupation of Lebanon, pursuing weapons of mass destruction and missile programs, and undermining United States and international efforts with respect to the stabilization and reconstruction of Iraq.
The regime’s brutality and repression of the Syrian people, who have called for freedom and a representative government, not only endangers the Syrian people themselves, but also generates instability throughout the region. The Syrian regime’s actions and policies, including with respect to chemical weapons and supporting terrorist organizations, continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. As a result, the national emergency declared in Executive Order 13338, which was expanded in scope in Executive Order 13572, and with respect to which additional steps were taken in Executive Order 13399, Executive Order 13460, Executive Order 13573, Executive Order 13582, Executive Order 13606, and Executive Order 13608, must continue in effect beyond May 11, 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 with respect to the actions of the Government of Syria.
https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/ and
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President Biden Continued The National Emergency with Respect to Securing the Information and Communications Technology and Services Supply Chain
May 8, 2024: On May 15, 2019, by Executive Order 13873, 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, foreign policy, and economy of the United States constituted by the unrestricted acquisition and use of certain information and communications technology and services transactions.
The unrestricted acquisition or use in the United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of these foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects. This threat continues 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 on May 15, 2019, must continue in effect beyond May 15, 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 13873 with respect to securing the information and communications technology and services supply chain.
https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/ and
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President Biden Continued The National Emergency with Respect to the Central African Republic
May 8, 2024: On May 12, 2014, by Executive Order 13667, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to the Central African Republic, which has been marked by a breakdown of law and order; intersectarian tension; the pervasive, often forced recruitment and use of child soldiers; and widespread violence and atrocities, including those committed by Kremlin-linked and Yevgeniy Prigozhin-affiliated entities such as the Wagner Group, and which threatens the peace, security, or stability of the Central African Republic and neighboring states.
The situation in and in relation to the Central African Republic continues 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 13667 on May 12, 2014, to deal with that threat must continue in effect beyond May 12, 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 with respect to the Central African Republic.
https://www.whitehouse.gov/briefing-room/presidential-actions/ and
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President Biden Continued The National Emergency with Respect to Yemen
May 14, 2024: On May 16, 2012, by Executive Order 13611, 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 Yemen and others that threatened Yemen’s peace, security, and stability. These actions include obstructing the political process in Yemen and blocking the implementation of the agreement of November 23, 2011, between the Government of Yemen and those in opposition to it, which provides for a peaceful transition of power that meets the legitimate demands and aspirations of the Yemeni people.
The actions and policies of certain former members of the Government of Yemen and others in threatening Yemen’s peace, security, and stability 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 13611 on May 16, 2012, to deal with that threat must continue in effect beyond May 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 13611 with respect to Yemen.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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President Biden Continued The National Emergency with Respect to the Stabilization of Iraq
May 20, 2024: On May 22, 2003, by Executive Order 13303, 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 posed by obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq.
The obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq 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 13303, as modified in scope and relied upon for additional steps taken in Executive Order 13290 of March 20, 2003, Executive Order 13315 of August 28, 2003, Executive Order 13350 of July 29, 2004, Executive Order 13364 of November 29, 2004, Executive Order 13438 of July 17, 2007, and Executive Order 13668 of May 27, 2014, must continue in effect beyond May 22, 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 with respect to the stabilization of Iraq declared in Executive Order 13303.
https://www.whitehouse.gov/briefing-room/presidential-actions/
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President Biden Notifies Congress on Intent to Designate Kenya as a Major Non-NATO Ally
May 22, 2024: In accordance with section 517 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2321k), President Biden provided notice on intent to designate Kenya as a Major Non-NATO Ally.
President Biden made this designation in recognition of Kenya’s many years of contributions to the United States Africa Command area of responsibility and globally and in recognition of our own national interest in deepening bilateral defense and security cooperation with the Government of Kenya. Kenya is one of the United States Government’s top counterterrorism and security partners in sub-Saharan Africa, and the designation will demonstrate that the United States sees African contributions to global peace and security as equivalent to those of our Major Non-NATO Allies in other regions.
https://www.whitehouse.gov/briefing-room/presidential-actions/page/2/
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Department of State, Directorate of Defense Trade Controls (DDTC)
International Traffic in Arms Regulations: Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States
May 1, 2024: 89 Fed. Reg. 35028: The Department of State (the Department) proposes to amend the International Traffic in Arms Regulations (ITAR) to support the goals of the AUKUS partnership, the enhanced trilateral security partnership among Australia, the United Kingdom, and the United States. This exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies. It is reflective of the nations’ collective commitment to implement shared security standards on protecting defense technology and sensitive military know-how. To achieve this, the Department proposes to amend the ITAR to include an exemption to the requirement to obtain a license or other approval from the Department’s Directorate of Defense Trade Controls (DDTC) prior to any export, reexport, retransfer, or temporary import of defense articles; the performance of defense services; or engagement in brokering activities between or among authorized users within Australia, the United Kingdom, and the United States. The Department also proposes to add a list of defense articles and defense services excluded from eligibility for transfer under the proposed new exemption; add to the scope of the exemption for intra-company, intra-organization, and intra-governmental transfers to allow for the transfer of classified defense articles to certain dual nationals who are authorized users or regular employees of an authorized user within the United Kingdom and Australia; and revise the section on expediting license review applications by referencing new processes for Australia, the United Kingdom, and Canada.
https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_public_portal_news_and_events and
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30-Day Notice of Proposed Information Collection: Statement of Material Change, Merger, Acquisition, or Divestiture of a Registered Party
May 13, 2024: 89 Fed. Reg. 41482: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995. DOS is requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment.
The Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs, U.S. Department of State, in accordance with the Arms Export Control Act (AECA) (22 U.S.C. 2751 et seq.) and the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), has the principal missions of taking final action on license applications and other requests for defense trade transactions via commercial channels, ensuring compliance with the statute and regulations, and collecting various types of reports. By statute, Executive Order, regulation, and delegation of authority, DDTC is charged with controlling the export and temporary import of defense articles, the provision of defense services, and the brokering thereof, which are covered by the U.S. Munitions List.
ITAR §§ 122.4 and 129.8 requires registrants to notify DDTC in the event of a change in registration information or if the registrant is a party to a merger, acquisition, or divestiture of an entity producing or marketing ITAR-controlled items. Based on certain conditions enunciated in the ITAR, respondents must notify DDTC of these changes at differing intervals—no less than 60 days prior to the event, if a foreign person is acquiring a registered entity, and/or within 5 days of its culmination. This information is necessary for DDTC to ensure registration records are accurate and to determine whether the transaction is in compliance with the regulations ( e.g., with respect to ITAR § 126.1); assess the steps that need to be taken with respect to existing authorizations ( e.g., transfers); and to evaluate the implications for US national security and foreign policy.
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Department of Defense, Defense Security Cooperation Agency (DSCA)
DSCA Notifies Congress of Potential FMS Sale To Malaysia
May 6, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government Malaysia has requested to buy ten (10) AN/AAQ-33 Sniper Advanced Targeting Pods. Also included are technical data and publications; personnel training; software and training equipment; 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. The principal contractor will be Lockheed Martin Corporation, located in Orlando, FL, and The Boeing Company, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/malaysia-sniper-advanced-targeting-pods
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DSCA Notifies Congress of Potential FMS Sale To the United Arab Emirates
May 7, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of the United Arab Emirates (UAE) has requested to buy up to one hundred forty-nine (149) WCU-33/B High-Speed Anti-Radiation Missile (HARM) Control Section Modification (HCSM) upgrade kits. Also included are high bandwidth HSCM telemetry kits loaned for integration support to be used in CONUS use only. This includes HARM Control Section containers; encryption devices; software and mission data support; test flight and live-fire range support; HARM support and test equipment; spare parts and repair and return support; publications and technical documentation; personnel training and training support; design and construction; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistical and program support. The estimated total cost is $144 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 Ukraine
May 10, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Ukraine has requested to buy three (3) High Mobility Artillery Rocket Systems (HIMARS). The estimated total cost is $30 million, which will be funded by the Government of Germany on behalf of Ukraine.
The Secretary of State has determined and provided detailed justification that an emergency exists that requires the immediate sale to the Government of Ukraine of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended. This will be a sale from U.S. Army inventory. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/ukraine-high-mobility-artillery-rocket-systems
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DSCA Notifies Congress of Potential FMS Sale To Romania
May 14, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The Government of Romania has requested to buy up to three hundred (300) AIM-9X Sidewinder Block II Tactical Missiles; forty (40) AIM-9X Sidewinder Block II Tactical Missile Guidance Units; forty (40) AIM-9X Sidewinder Block II Captive Air Training Missiles (CATM); and twenty (20) AIM-9X Sidewinder Block II CATM Guidance Units. Also included are missile containers; personnel training and training equipment; classified and unclassified publications and technical documents; warranties; U.S. Government engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total program cost is $340.8 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.
https://www.dsca.mil/press-media/major-arms-sales/romania-aim-9x-sidewinder-block-ii-missiles
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DSCA Notifies Congress of Potential FMS Sale To NATO
May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that The NATO Support and Procurement Agency (NSPA) has requested to buy radar equipment spares and additional items and services that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales case, valued at $40.26 million, included Alliance Ground Surveillance (AGS) system equipment and support, including: AN/APG-68 radar processors; Global Hawk engine controllers; classified and unclassified spare components and parts; consumables and accessories; repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. This notification is for the combined non-MDE AGS system equipment and services, including: AN/APG-68 radar processors; Global Hawk engine controllers; communications equipment spares; classified and unclassified spare components and parts; consumables, accessories, and repair and return support; facilities support including storage; classified and unclassified publications and technical documentation; classified and unclassified software delivery and support; transportation support; U.S. Government and contractor engineering, technical, and logistics support services; studies and surveys; and other related elements of logistics and program support. The estimated total cost is $250.2 million. The principal contractor will be Northrop Grumman located in Mojave, 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 Ukraine
May 16, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Ukraine has requested to buy equipment and services for sustainment support of U.S. Army supplied vehicles and weapon systems, utilizing Blanket Orders, Cooperative Logistics Supply Support Arrangement (CLSSA), and/or Simplified Non-Standard Acquisition Program (SNAP), as well as other related elements of logistics and program support. The estimated total cost is $100 million. The principal contractor(s) will be determined from approved vendors. 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 Canada
May 21, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Canada has requested to buy an additional six hundred ninety (690) KMU-572 Joint Direct Attack Munition (JDAM) tail kits; seventy-five (75) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits that will be added to a previously implemented case whose value was under the congressional notification threshold. The original Foreign Military Sales (FMS) case, valued at $16.1 million ($11.8 million in MDE), included a total of two hundred ten (210) KMU-572 JDAM tail kits; fifty (50) KMU-556 JDAM tail kits; and twenty-five (25) KMU-557 JDAM tail kits. This notification is for a combined total of nine hundred (900) KMU-572 JDAM tail kits; one hundred twenty-five (125) KMU-556 JDAM tail kits; and fifty (50) KMU-557 JDAM tail kits. Also included are Laser Illuminated Target Detectors; FMU-139 fuzes; weapons support equipment; spare and repair parts, consumables and accessories, and repair and return support; 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 $96.4 million. The principal contractor will be Boeing Corporation, located in St. Louis, MO. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/canada-joint-direct-attack-munition-tail-kits
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DSCA Notifies Congress of Potential FMS Sale to Brazil
May 24, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Brazil has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty-four (34) T700-GE-701D engines (24 installed, 10 spares); twenty-eight (28) EAGLE-M Embedded Global Position Systems with Inertial Navigation (EGI) or functional equivalent (24 installed, 4 spares); and twenty-four (24) AN/ARC-231A radio systems. The following non-MDE is also included: AN/PYQ-10 Simple Key Loader (SKL), KIV-77 Common Identification Friend or Foe (IFF) crypto appliques, APX-123A Identification Friend or Foe (IFF) transponders; AN/ARC-231 radio systems; ARC-201D Single Channel Ground and Airborne Radio System (SINCGARS) or functional equivalents; ARC-220 high frequency airborne communication systems or functional equivalents with KY-100M; VRC-100 advanced high frequency ground/vehicular communications systems; ARN-147 navigation receivers; ARN-149 low frequency automatic direction finders; ARN-153 advanced digital Tactical Airborne Navigation (TACAN) receiver-transmitters; APN-209 radar altimeter systems; AN/ARC-210 Gen 6 very high frequency/frequency modulation radios; AN/AVR-2B(V) laser warning systems (provisions only); Airspace Concept Evaluation System (ACES); M-134D-H minigun, mount, power supply, and ammunition handling systems gun and mount accessories package; contractor-provided gun and mount accessories, including spare parts, in support of the M-134D-H minigun systems; Aviation Mission Planning System (AMPS); Aviation Ground Support Equipment (AGSE); HGU-56/P Rotary Wing Helmets (RWH); Advanced Sight Display Computers (ASDC); Common Display Interface Units (CDIU); Wide Color Day Display Module (WCDDM); Wide Color Night Display Module (WCNDM); ADS-B Out ability; Integrated Area Navigation (I-RNAV); RDR-7000 weather radar systems; external rescue hoists; Traffic Collision Avoidance Systems (TCAS); Fast Rope Insertion Extraction System (FRIES); EBC-406HM Emergency Locator Transmitters (ELT); Aircrew Combat Equipment (ACE); Internal Auxiliary Fuel Tank System (IAFTS); technical assistance and logistics support services; publications; and other related elements of logistics and program support. The estimated total cost is up to $950 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements proposed in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/brazil-uh-60m-black-hawk-helicopters-0
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DSCA Notifies Congress of Potential FMS Sale to Austria
May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Austria has requested to buy twelve (12) UH-60M Black Hawk helicopters with twenty-six (26) T700-GE-701D engines; fifteen (15) AN/AAR-57 Counter Missile Warning Systems (CMWS); and thirty (30) H-764U Embedded Global Positioning Systems with Inertial Navigation (EGI) with country-unique selective availability anti-spoofing modules (or Future M-Code replacement). The following non-MDE is also included: APR-39C(V)1/4 radar warning receivers; AVR-2B laser detecting sets; AN/ARN-147(V) very high frequency omni-directional range instrument landing system receiver radio; AN/ARN-149(V) low frequency automatic direction finder (ADF) radio receiver; AN/ARN-153 Tactical Air Navigation System (TACAN) receiver transmitter; AN/APN-209 radar altimeter radios; EBC-406HM emergency locator transmitter (ELT); Improved Heads Up Display (IHUD); signal data converters for IHUD; color weather radars; MX-10D electro optical and infrared with laser designator; Engine Inlet Barrier Filters (EIBF); Ballistic Armor Protection Systems (BAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction System (FRIES); External Rescue Hoist (ERH); rescue hoist equipment sets; dual patient litter system (DPLS) sets; Martin Baker palletized crew chief and gunner seats with crashworthy floor structural modifications; External Stores Support System (ESSS); instrument panel; cockpit multi-function display (MFD); degraded visual environment (DVE) system; Traffic Alert Collision Avoidance System (TCAS II); cargo hook scale; sling load observation capability; Direction Finder DF-935; environmental control system; snow skis provisions; Bambi bucket provisions; Helicopter Terrain Awareness System (HTAWS); CONRAD troop radio capability; TETRA BOS radio capability; very important person kit; 28 volts of direct current 10 ampere utility power socket (cabin); Universal Serial Bus (USB) charging outlet; Crashworthy Extended Range Fuel Systems (CEFS) tanks; Black Hawk Aircrew Trainer (BAT); training devices; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics support. The estimated cost is $1.05 billion. The principal contractors will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/austria-uh-60m-blackhawk-helicopters
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DSCA Notifies Congress of Potential FMS Sale to Sweden
May 29, 2024: The U.S. Department of Defense’s Defense Security Cooperation Agency (DSCA) has notified Congress that the Government of Sweden has requested to buy twelve (12) UH-60M Black Hawk helicopters; thirty (30) T700-GE-701D engines (24 installed, 6 spares); and seventeen (17) AN/AAR-57 common missile warning systems (CMWS). The following is also included: AN/APR-39C(V)1/4 radar warning receivers; AN/AVR-2B laser detecting sets; AN/ARN-149(V) low frequency automatic direction finder radio receivers; AN/ARN-153 tactical air navigation systems (TACAN) receiver transmitters; AN/APN-209 radar altimeters; EBC-406HM emergency locator transmitters (ELT); Enhanced Ballistic Armor Protection Systems (EBAPS); Internal Auxiliary Fuel Tank Systems (IAFTS); Fast Rope Insertion Extraction Systems (FRIES); external rescue hoists (ERH); rescue hoist equipment sets; Martin Baker palletized crew chief and gunner seats with crashworthy floor structural modifications; aircraft fire extinguisher cartridge; impulse cartridge; thruster TCU-3/A; helmets; transportation; organizational equipment; spare and repair parts; support equipment; tools and test equipment; technical data and publications; personnel training and training equipment; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $900 million. The principal contractor will be Lockheed Martin, Sikorsky, located in Stratford, CT. There are no known offset agreements in connection with this potential sale.
https://www.dsca.mil/press-media/major-arms-sales/sweden-uh-60m-black-hawk-helicopters
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Department of Commerce – Bureau of Industry and Security (BIS)
Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership; Correction
May 8, 2024: 89 Fed. Reg. 38837: On April 19, 2024, BIS published in the Federal Register an interim final rule (IFR), “Export Control Revisions for Australia, United Kingdom, United States (AUKUS) Enhanced Trilateral Security Partnership.” The April 19 IFR removed license requirements, expanded the availability of license exceptions, and reduced the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the United Kingdom (UK) to enhance technological innovation among the three countries and support the goals of the AUKUS Trilateral Security Partnership. This correction revises a footnote included in the April 19 IFR to add greater specificity for the Export Control Classification Numbers (ECCN) referenced, so only portions of those 0x5zz ECCNs in the footnote that were previously controlled for national security column 1 (NS1) or regional stability column 1 (RS1) reasons for control for the destinations of Australia and the United Kingdom will continue to require a license to Australia and the United Kingdom based on the license requirements specified in this footnote.
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Conforming and Clarifying Changes to the Export Administration Regulations (EAR)
May 10, 2024: 89 Fed. Reg. 40369: This final rule makes conforming and clarifying changes to the Export Administration Regulations (EAR). These changes include making conforming changes to the EAR to ensure that destination names reflect the current destination names that are recognized by the United States Government, clarifying the removal of certain license requirements for exports, reexports, and transfers (in-country) to and within Australia and the United Kingdom, making a conforming change to reflect that Cyprus is no longer a Country Group D:5 country, and clarifying how Russia and the Russian Federation are referenced for consistency with the designation of Russia as a U.S. Arms Embargoed country.
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Antiboycott Advisory on Turkey
May 14, 2024: The Turkish government has recently announced that it will suspend all exports and imports to and from Israel until the Israeli government allows an uninterrupted and sufficient flow of humanitarian aid into Gaza.
All United States persons, wherever located, are reminded that, with respect to their activities in United States commerce, the Export Administration Regulations prohibit taking certain actions in furtherance or support of an unsanctioned foreign boycott maintained by a country against a country friendly to the United States and require reporting of receipt of a boycott-related request to BIS. U.S. companies operating in Turkey, in particular, are cautioned to be alert to their receipt of any requests to refrain from importing or exporting goods to or from Israel or to provide certification that the goods are not of Israeli origin or do not contain Israeli-origin components or materials.
https://www.bis.gov/press-release/antiboycott-advisory-turkiye and
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Department of Commerce Announces Revisions to Section 232 Steel and Aluminum Tariff Exclusions Process
May 17, 2024: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule revising the Section 232 exclusions process for steel and aluminum imports. These changes, effective July 1, 2024, aim to refine the framework under which exclusions from the tariffs on steel and aluminum can be requested, ensuring a fairer and more transparent process.
The revisions remove twelve General Approved Exclusions (GAEs), six for steel and six for aluminum. The GAEs were originally established to streamline the exclusions process for products consistently found not to be produced in sufficient quantity or quality in the United States. Reversing previous exemptions that facilitated imports of these metals aims to strengthen our U.S. industrial base and our national security by reducing reliance on foreign manufacturing and enhancing domestic production of steel and aluminum.
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U.S. Census Bureau
May 21, 2024: Tips on How to Resolve AES Response Messages
When a shipment is filed to the AES, a system response message is generated and indicates whether the shipment has been accepted or rejected. If the shipment is accepted, the AES filer receives an Internal Transaction Number (ITN) as confirmation. Though the shipment is accepted, the filer may still receive a Verify Message, Compliance Alert, Informational Message or Warning Message along with their ITN. However, if the shipment is rejected, a Fatal Error notification is received and must be corrected to receive a valid ITN.
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: 622
Narrative: Schedule B/HTS Number Missing
Severity: Fatal
Reason: The Export Information Code is not ‘HH’ for household goods and the Schedule B/HTS Number is missing.
Resolution: A Schedule B/HTS Number must be declared on an EEI with the exception of household goods reported with Export Information Code ‘HH’.
Verify the Schedule B/HTS Number, correct the shipment and resubmit.
Response Code: 627
Narrative: 1st Unit of Measure Code Unknown
Severity: Fatal
Reason: The Schedule B/HTS Number reported requires a 1st Unit of Measure Code to be reported and the 1st Unit of Measure Code is not valid in the AES.
Resolution: The 1st Unit of Measure Code, based on the Schedule B/HTS reported, must be a valid code contained in Appendix K, Unit of Measure Codes.
Verify the 1st Unit of Measure Code required for the Schedule B/HTS Number reported, correct the shipment and resubmit.
For a complete list of AES Response Codes, their reasons, and resolutions, see Appendix A – Commodity Filing Response Messages.
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.
| 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
May 8, 2024: Yuksel Senbol, 36, of Orlando, pleaded guilty to 25 felony counts in Florida federal court, including conspiracy to defraud the United States, conspiracy to commit wire fraud, eight counts of wire fraud, conspiracy to commit money laundering, seven counts of money laundering, conspiracy to violate the Export Control Reform Act (ECRA), four counts of violating the ECRA, and one count of violating the Arms Export Control Act.
According to court documents, beginning in approximately April 2019, Senbol operated a front company in the Middle District of Florida called Mason Engineering Parts LLC. She used this front company to assist her co-conspirators, Mehmet Ozcan and Onur Simsek, to fraudulently procure contracts to supply critical military components to the Department of Defense. These components were intended for use in the U.S. Navy Nimitz and Ford Class Aircraft Carriers, U.S. Navy Submarines, U.S. Marine Corps Armored Vehicles, and U.S. Army M-60 Series Tank and Abrahams Battle Tanks, among other weapons systems.
Senbol faces up to 10 years in prison for the conspiracy to defraud the United States offense and for each count of money laundering. She faces up to 20 years in prison for each count of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, conspiracy to violate the ECRA, violating the ECRA and violating the Arms Export Control Act. Sentencing is scheduled for Aug. 6. Alleged co-conspirators Mehmet Ozcan and Onur Simsek are fugitives.
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May 22, 2024: The Justice Department announced that Pen Yu, also known as Ben Yu, 51, of Gibsonton, Florida, and Gregory Muñoz, 45, of Minneola, Florida, have each pleaded guilty to one count of wire fraud conspiracy for their roles in a scheme to fraudulently procure deeply discounted products from Massachusetts biochemical company Sigma-Aldrich Inc., doing business as MilliporeSigma, and export them to China using falsified export documents.
In addition, the Justice Department announced that it has declined the prosecution of MilliporeSigma after considering the factors set forth in the Department’s Principles of Federal Prosecution of Business Organizations and the National Security Division Enforcement Policy for Business Organizations (NSD Enforcement Policy). The NSD Enforcement Policy creates a presumption that companies that (1) voluntarily self-disclose to NSD potentially criminal violations arising out of or relating to the enforcement of export control or sanctions laws, (2) fully cooperate, and (3) timely and appropriately remediate will generally receive a non-prosecution agreement, unless aggravating factors are present. This is the first time that NSD has declined the prosecution of a company under the NSD Enforcement Policy.
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Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
May 9, 2024: 89 Fed. Reg. 41886: The U.S. Commerce Department’s Bureau of Industry and Security (BIS) added 37 entities to the Entity List under the Export Administration Regulations (EAR). This action reflects BIS ‘s commitment to safeguarding U.S. national security and foreign policy interests. Also, the Commerce Department has added 355 PRC entries to the Entity List – more than any prior Administration.
Among the new entities added to the Entity List, 22 institutes and firms were added for their participation in the People’s Republic of China’s (PRC) quantum technology advancements and for acquiring or attempting to acquire U.S.-origin items to enhance the PRC’s quantum capabilities. These activities have substantial military applications and pose a significant threat to U.S. national security. Additionally, some of these entities are linked to advancements in the PRC’s nuclear programs or have been involved in the shipment of controlled items to Russia following its invasion of Ukraine in February 2022.
Four entities were added for acquiring or attempting to acquire U.S.-origin items to be used by the PRC’s military for its unmanned aerial systems (UAS).
Eleven entities were added under the destination of PRC for their involvement in China’s High Altitude Balloon program, which poses significant national security concerns. This builds on previous actions the Commerce Department took in February 2023 to target PRC aerospace programs, including airships, balloons and related materials.
The list of sanctioned entities can be found below:
- AEE Shenzhen Yidian Aviation Technology Co., Ltd.;
- Beijing Academy of Quantum Information Sciences;
- Beijing BDStar Navigation Co., Ltd;
- Beijing Leike Defense Technology Co., Ltd.;
- Beijing Ruidakang Technology Co., Ltd.;
- Beijing Tianhaida Technology Co., Ltd.;
- Beijing Zhongshang Dingsheng Mechanical and Electrical Equipment Co., Ltd.;
- CETC Chip Technology Co., Ltd.;
- Ceyear Technologies Co., Ltd.;
- Chengdu Day Communication Technology Co., Ltd.;
- Chengdu Zongheng Automation Technology Co., Ltd.;
- China Electronics Technology Group Corporation 16th Research Institute;
- China Electronics Technology Group Corporation 32nd Research Institute;
- China Electronics Technology Group Corporation 36th Research Institute;
- China Electronics Technology Group Corporation 41st Research Institute;
- China Electronics Technology Group Corporation 45th Research Institute;
- China Electronics Technology Group Corporation Electronic Equipment Group Co., Ltd.;
- Chinese Academy of Science, Center for Excellence in Quantum Information and Quantum Physics;
- Chinese Academy of Sciences, Institute of Physics;
- Chinese Academy of Sciences, Key Laboratory for Quantum Information;
- Chinese Academy of Sciences’ Shanghai Institute of Microsystem and Information Technology;
- CSIC Pride (Nanjing) Cryogenic Technology Co., Ltd.;
- GEOVIS Technology Co., Ltd.;
- Hefei National Laboratory for Quantum Information Science;
- Hexin Xingtong Technology (Beijing) Co., Ltd.,
- Jinan Institute of Quantum Technology;
- Origin Quantum Computing Technology (Hefei) Co., Ltd.;
- Quantum Science and Technology Yangtze River Delta Industrial Innovation Center;
- Shanghai Center for Quantum Science Research;
- Shenzhen Institute of Quantum Science and Engineering;
- Shenzhen Yidian Technology Co., Ltd.;
- Suzhou Telecom Electric Plant Co., Ltd.;
- TaiYuan EFT Equipment Manufacturing Co., Ltd;
- United Microelectronics Center Co., Ltd.;
- University of Science and Technology of China;
- Xi’an Hengda Microwave Technology Development Co., Ltd.; and
- Zhongke Xingtu Space Technology Co., Ltd.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
May 1, 2024: The Department of the Treasury acted to further degrade Russia’s ability to sustain its war machine, continuing a multilateral campaign to limit the Kremlin’s revenue and access to the materiel it needs to prosecute its illegal war against Ukraine. The actions target Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that help Russia acquire key inputs for weapons or defense-related production.
The United States, along with many international partners, is particularly concerned about entities based in the People’s Republic of China (PRC) and other third countries that provide critical inputs to Russia’s military-industrial base. This support enables Russia to continue its war against Ukraine and poses a significant threat to international security. The almost 300 targets being sanctioned by both Treasury and the Department of State include sanctions on dozens of actors that have enabled Russia to acquire desperately needed technology and equipment from abroad.
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 95, “Authorizing Civil Aviation Safety and Wind Down Transactions Involving Limited Liability Company Aviakompaniya Pobeda,” Russia-related General License 96, “Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels,” and Russia-related General License 97, “Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on May 1, 2024.”
Russia-related General License 95: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving Limited Liability Company Aviakompaniya Pobeda are authorized through 12:01 a.m. eastern daylight time, July 30, 2024, provided that the goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.
Russia-related General License 96: All transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to one of the following activities involving blocked persons are authorized through 12:01 a.m. eastern daylight time, July 30, 2024, provided that any payment to a blocked person must be made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations.
Russia-related General License 97: 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, June 17, 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.
Please see the full list of sanctioned individuals, entities, and vessels at the links below.
https://ofac.treasury.gov/recent-actions/20240501 and https://home.treasury.gov/news/press-releases/jy2318
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May 2, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five individuals for helping U.S.-designated Hizballah money exchanger Hassan Moukalled (Moukalled) and his company, CTEX Exchange, evade sanctions and facilitate illicit activities in support of Hizballah. These individuals, including two co-founders of CTEX Exchange and two of Moukalled’s sons, operate two companies in Lebanon and the United Arab Emirates (UAE) that were concurrently designated. Individuals and entities targeted are designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups, their supporters, and those who aid acts of terrorism.
The following individuals have been added to OFAC’s SDN List:
- Al-Zein, Mazen Hassan of Lebanon;
- Mansur, Firas Hasan of Lebanon;
- Moukalled, Firas Hasan of Lebanon;
- Mushantaf, Andriyah Samir of Lebanon; and
- Youssef, Adnan Mahmoud of Lebanon.
The following entities have been added to OFAC’s SDN List:
- Teleport Company Sal of Lebanon; and
- The Crystal Group of the United Arab Emirates.
https://home.treasury.gov/news/press-releases/jy2319 and https://ofac.treasury.gov/recent-actions/20240502
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May 6, 2024: OFAC has deployed its new Sanctions List Service (SLS). SLS is now the primary application OFAC will use to deliver sanctions list files and data to the public.
SLS includes support for all OFAC legacy and modern sanctions list data files.
While certain sanctions list data are now hosted within the SLS cloud, existing links to OFAC list files remain functional through URL redirects.
https://ofac.treasury.gov/recent-actions/20240506_33 and
https://ofac.treasury.gov/sanctions-list-service
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May 7, 2024: The United States designated Dmitry Yuryevich Khoroshev, a Russian national and a leader of the Russia-based LockBit group, for his role in developing and distributing LockBit ransomware. This designation is the result of a collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, the United Kingdom’s National Crime Agency, the Australian Federal Police, and other international partners. Concurrently, the Department of Justice unsealed an indictment and the Department of State announced a reward offer for information leading to the arrest and/or conviction of Khoroshev. The United Kingdom and Australia also announced the designation of Khoroshev.
The following individual has been added to OFAC’s SDN List:
- Khoroshev, Dmitry Yuryevich of Russia.
https://home.treasury.gov/news/press-releases/jy2326 and
https://ofac.treasury.gov/recent-actions/20240507
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May 8, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Reporting, Procedures and Penalties Regulations (RPPR). The RPPR sets forth standard reporting and recordkeeping requirements and license application and other procedures relevant to the economic sanctions programs administered by OFAC.
https://ofac.treasury.gov/recent-actions/20240508 and
https://ofac.treasury.gov/media/932891/download?inline
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May 10, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License 8N, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities.”
Venezuela General License 8N: All transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and (iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern standard time, November 15, 2024, for the following entities and their subsidiaries (collectively, the “Covered Entities”):
- Halliburton
- Schlumberger Limited
- Baker Hughes Holdings LLC
- Weatherford International, Public Limited Company
https://ofac.treasury.gov/recent-actions/20240510 and
https://ofac.treasury.gov/media/932871/download?inline
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May 14, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one Russian individual and three Russia-based companies involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than $1.5 billion worth of shares belonging to U.S.-designated Russian oligarch Oleg Vladimirovich Deripaska (Deripaska).
OFAC designated Deripaska on April 6, 2018 pursuant to Executive Order (E.O.) 13661 for having acted or purported to act for or on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation as well as pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Deripaska is also sanctioned by Australia, Canada, the European Union, New Zealand, and the United Kingdom. On September 29, 2022, the U.S. Department of Justice charged Deripaska with conspiring to violate and evade U.S. sanctions in violation of the International Emergency Economic Powers Act.
The following individual has been added to OFAC’s SDN List:
- Beloglazov, Dimitrii Aleksandrovich of Russia.
The following entities have been added to OFAC’s SDN List:
- Aktsionerno Obshcestvo Iliadis of Russia;
- International Company Joint Stock Company Raperia Trading Limited of Russia; and
- Obschestvo Organichennoi Otvetstvennostiu Titlu of Russia.
https://ofac.treasury.gov/recent-actions/20240514 and
https://home.treasury.gov/news/press-releases/jy2337 and
https://home.treasury.gov/news/press-releases/sm0338 and
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May 15, 2024: the Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted the Ortega-Murillo regime’s repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations. Treasury imposed sanctions on three Nicaragua-based entities, the Training Center of the Russian Ministry of Internal Affairs in Managua (RTC); Compania Minera Internacional, Sociedad Anónima (COMINTSA); and Capital Mining Investment Nicaragua, Sociedad Anónima (Capital Mining), pursuant to Executive Order (E.O.) 13851, as amended.
The RTC is a Nicaragua-based subdivision of the Government of the Russian Federation’s (GOR) Ministry of Internal Affairs, which trains those under the Ortega-Murillo regime’s command under the Russian authoritarian government’s playbook of oppression. It is a key actor in the Nicaraguan regime’s repression of civil society and unjust detention and imprisonment of individuals for expressing dissent, or otherwise peacefully exercising their human rights and fundamental freedoms.
The following entities have been added to OFAC’s SDN List:
- Capital Mining Investment Nicaragua, Sociedad Anonima of Nicaragua;
- Compania Minera Internacional, Sociedad Anonima of Nicaragua; and
- Training Center of The Russian Ministry of Internal Affairs in Managua of Nicaragua.
https://ofac.treasury.gov/recent-actions/20240515 and
https://home.treasury.gov/news/press-releases/jy2339
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May 15, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ali Yagoub Gibril and Osman Mohamed Hamid Mohamed, pursuant to Executive Order (E.O.) 14098, for leading the Rapid Support Forces’ (RSF) war campaign. The RSF’s attacks in North Darfur, which started last month, have caused dozens of civilian casualties, including children. The RSF encirclement of North Darfur’s capital of El Fasher and recent fighting between the RSF and the Sudanese Armed Forces have endangered nearly one million Sudanese civilians in the last major safe haven in Darfur, impeded humanitarian access, increased the risk of mass atrocities, and could undermine vital peace efforts.
The following individuals have been added to OFAC’s SDN List:
- Gibril, Ali Yagoub of Sudan; and
- Mohamed, Osman Mohamed Hamid of Sudan.
https://ofac.treasury.gov/recent-actions/20240515 and
https://home.treasury.gov/news/press-releases/jy2340
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May 16, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two Russian individuals and three Russia-based entities for facilitating weapons transfers between Russia and the Democratic People’s Republic of Korea (DPRK). This action promotes U.S. government objectives to disrupt and expose arms transfers between the DPRK and Russia and builds upon sanctions imposed by the Department of the Treasury and the Department of State related to DPRK-Russia arms transfers, including the transfer and testing of DPRK-origin ballistic missiles for Russia’s use against Ukraine. This action demonstrates our resolve to impose costs on and hold the DPRK and Russia to account for their unlawful activities.
The following individuals have been added to OFAC’s SDN List:
- Budnev, Aleksey of Russia; and
- Gazaryan, Rafael Anatolyevich of Russia.
The following entities have been added to OFAC’s SDN List:
- Rafort Limited Liability Company of Russia;
- Tekhnologiya, OOO of Russia; and
- Trans Kapital Limited Liability Company of Russia.
https://ofac.treasury.gov/recent-actions/20240516 and
https://home.treasury.gov/news/press-releases/jy2345
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May 16, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate Iran-related General License D-2 and publishing an associated List of Services, Software, and Hardware Incident to Communications, which can be found under the General Licenses and Federal Register Notices sections of the Iran Sanctions page.
In addition, OFAC published a new Frequently Asked Question (FAQ) 1173 and amended 26 ITSR-related FAQs.
Frequently Asked Question 1173:
Q: What are “user authentication services” for purposes of the general license in 31 CFR § 560.540 of the Iranian Transactions and Sanctions Regulations (ITSR)?
A: User authentication services are services used to login or verify the identity of a user to a particular software or service, such as a user identification account often used to login to email, mobile app stores, or other activities authorized by 31 CFR § 560.540.
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May 17, 2024: 89 Fed. Reg. 43311: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) adopted a final rule amending the Iranian Transactions and Sanctions Regulations (ITSR) to incorporate a general license that was previously published on OFAC’s website. In particular, the rule incorporates, with amendments, a general license relating to the export, reexport, and provision of certain services, software, and hardware incident to communications over the internet. This amendment also makes additional conforming changes.
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May 28, 2024: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals, Yunhe Wang, Jingping Liu, and Yanni Zheng, for their activities associated with the malicious botnet tied to the residential proxy service known as 911 S5. OFAC also sanctioned three entities—Spicy Code Company Limited, Tulip Biz Pattaya Group Company Limited, and Lily Suites Company Limited—for being owned or controlled by Yunhe Wang.
The following individuals have been added to OFAC’s SDN List:
- Liu, Jingping of China;
- Wang, Yunhe of China; and
- Zheng, Yanni of China.
The following entities have been added to OFAC’s SDN List:
- Lily Suites Company Limited of Thailand;
- Spicy Code Company Limited of Thailand; and
- Tulip Biz Pattaya Group Company Limited of Thailand.
https://ofac.treasury.gov/recent-actions/20240528_33 and
https://ofac.treasury.gov/recent-actions
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May 28, 2024:89 Fed. Reg. 46323: The Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 CFR part 515, (CACR) to further implement the policy announced by the Biden-Harris Administration on May 16, 2022 to increase support for the Cuban people. These regulatory amendments update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people.
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to further implement portions of the President’s foreign policy toward Cuba. Among other things, these amendments increase support for internet freedom for the Cuban people and independent Cuban private sector entrepreneurs by expanding authorizations for internet-based services and a range of financial transactions.
OFAC is also issuing six new, Cuba-related Frequently Asked Questions (FAQs 1174-1179)
FAQ 1174:
Q: What level of due diligence are web hosting providers expected to conduct to ensure that a hosted website is not “for the promotion of tourism” pursuant to 31 CFR § 515.578?
A: Persons providing web hosting services authorized pursuant to 31 CFR § 515.578 may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know their provision of web hosting services is for the promotion of tourism.
FAQ 1175:
Q: Are services related to application programming interfaces (APIs) that are incident to the exchange of communications over the internet authorized for exportation or reexportation to Cuba pursuant to OFAC regulations?
A: Yes. Section 515.578(a)(1)(i) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of certain services. Among these are API-related services incident to the exchange of communications over the internet. This authorization may include, for example, API services incident to, among other services described in 31 CFR § 515.578(a)(1)(i), web maps, social media platforms, collaboration platforms, video conferencing, and e-gaming and e-learning platforms. Section 515.578(a)(ii) of the CACR authorizes the direct or indirect exportation or reexportation to Cuba, from the United States or by a person subject to U.S. jurisdiction, of services to support the exchange of communications over the internet, such as software design, business consulting, information technology management services, and cloud-based services (including remote data storage, data transport service, content distribution networks, virtual machines, software-as-a-service, and infrastructure-as-a-service).
With respect to the exportation or reexportation of API software to Cuba, including the download of such software, 31 CFR § 515.533(a) authorizes all transactions ordinarily incident to the export to Cuba of items from the United States, or reexport to Cuba of items from a third country, if the export or reexport is licensed or otherwise authorized by the Department of Commerce pursuant to the Export Administration Regulations (EAR) (15 CFR parts 730 through 774). For example, the export and reexport to Cuba of certain software is authorized under License Exception Consumer Communications Devices (CCD), 15 CFR § 740.19, and License Exception Support for the Cuban People (SCP), 15 CFR § 740.21.
FAQ 1176:
Q: What level of due diligence are internet-based service providers expected to conduct to determine whether the intended recipients of an export or reexport are prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party pursuant to 31 CFR § 515.578(b)(1)?
A: Section 515.578(b)(1) of the CACR excludes from authorization under 31 CFR 515.578(a)(1)-(3) the direct or indirect exportation or reexportation of services with knowledge or reason to know that such services are intended for a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, or to organizations administered or controlled by the Government of Cuba or the Cuban Communist Party, except as specified in 31 CFR § 515.578(a)(4).
For purposes of assessing whether exports or reexports are excluded from 31 CFR § 515.578 pursuant to 31 CFR § 515.578(b)(1), internet-based service providers subject to U.S. jurisdiction may reasonably rely on information provided to them by their customers in the ordinary course of business, unless they know or have reason to know a transaction is not authorized.
FAQ 1177:Top of Form
Q: What internet-based services can be exported or reexported from the United States or by persons subject to U.S. jurisdiction to prohibited officials of the Government of Cuba, prohibited members of the Cuban Communist Party, or organizations administered or controlled by the Government of Cuba or the Cuban Communist Party?
A: Section 515.578(a)(4)(i) of the CACR authorizes the exportation or reexportation, directly or indirectly, from the United States or by a person subject to U.S. jurisdiction, to a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, of certain internet-based services and services related to certain exportations and reexportations, as described in 31 CFR § 515.578(a)(1) or 31 CFR § 515.578(a)(2), respectively, provided that such services are widely available to the public at no cost to the user. Examples of authorized services include:
- Social media platforms;
- Collaboration platforms;
- Video conferencing;
- E-gaming and e-learning platforms;
- Automated translation;
- Web maps;
- User authentication services;
- Cloud-based services to support services described in section § 515.584(a)(1)(i); and
Services to install, repair, or replace items related to communication, or items used to develop software that improves the free flow of information or that will support private sector activities in Cuba consistent with the export or reexport licensing policy of the Department of Commerce.
FAQ 1178:
Q: Can a good be considered “produced by independent private sector entrepreneurs” for purposes of 31 CFR § 515.582 (authorizing the importation of certain goods and services produced by independent private sector entrepreneurs) if a Cuban state-owned entity is involved?
A: Section 515.582 of the CACR authorizes persons subject to U.S. jurisdiction to import certain goods and services produced by independent private sector entrepreneurs, as determined by the State Department and set forth on the State Department’s Section 515.582 List. See FAQ 770.
In determining whether a good is produced by an independent private sector entrepreneur, as defined in 31 CFR § 515.340, persons subject to U.S. jurisdiction should consider the extent of Cuban state-owned entities’ involvement in the production and exportation of such goods. For example, goods generally are not considered produced by independent private sector entrepreneurs if the manufacturing or processing conducted by Cuban state-owned entities results in a product with a new name, character, or use. For example, an agricultural commodity grown by an independent grower but then processed by Cuban state-owned entities into a new product prior to exportation would not be a good produced by an independent private sector entrepreneur for purposes of 31 CFR § 515.582. However, a good can still be considered produced by an independent private sector entrepreneur if, for example, Cuban state-owned entities are involved only in packing of the final product or acting solely as an export agent.
FAQ 1179:
Q: What type of small businesses are considered an “independent private sector entrepreneur” (as defined in 31 CFR § 515.340)?
A: Section 515.340 defines the term “independent private sector entrepreneur” to mean a Cuban national who is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party, and who is one or more of the following: (a) an owner, including a self-employed individual (cuentapropista), or employee of a small private business entity, private cooperative, or a sole proprietorship located in Cuba, in each case of up to 100 employees; (b) an independent contractor or consultant; (c) a small farmer who owns his or her own land; (d) a small usufruct farmer who cultivates state-owned land to sell products on the open market; or (e) a private cooperative or small private business entity located in Cuba of up to 100 employees that is owned only by individuals described in paragraphs (a) through (d) of § 515.340. For example, small private business entities or private cooperatives owned only by independent private sector entrepreneurs, as defined, could include:
- Agricultural businesses and farming cooperatives;
- Animal feed and veterinary services;
- IT services, software development businesses, and mobile application developers
- Food and beverage importers, production/processing businesses, packaging and food distributors;
- Clothing, jewelry, fashion design, and beauty/cosmetics suppliers and services;
- Historic preservation and cultural preservation businesses;
- Arts-related businesses;
- Machinery manufacturing and repair businesses;
- Shipping, logistics, expediting, and delivery of goods businesses;
- Medical supply businesses;
- Restaurants and bars;
- Taxis and transportation services;
- Bed and breakfasts;
- Manufacturing companies;
- Business consulting services, marketing and branding services;
- Accounting and bookkeeping services;
- Home construction business and remodeling, plumbing, electrical, or other repair companies for business or residential facilities and homes;
- Furniture design and manufacturing companies;
- Travel services;
- Vendors of personal care and household items, furniture, and appliances;
- Interior decoration and design businesses;
- Film and media production or journalism businesses;
- Gyms, personal training, or fitness classes; and
- Mechanical services (automobile, refrigeration, heating and A/C services and repair).
https://home.treasury.gov/news/press-releases/jy2374 and
https://ofac.treasury.gov/media/932896/download?inline and
https://ofac.treasury.gov/faqs/added/2024-05-28 and
https://ofac.treasury.gov/recent-actions/20240528 and
https://www.federalregister.gov/documents/2024/05/29/2024-11618/cuban-assets-control-regulations
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May 30, 2024: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) continued to counter Russia’s destabilizing activities in Africa by sanctioning two companies that are linked to the Private Military Company “Wagner” (Wagner Group). Mining Industries SARLU and Logistique Economique Etrangere SARLU are being designated pursuant to Executive Order (E.O.) 14024 for enabling Wagner Group security operations and Wagner Group-linked illicit mining endeavors in the Central African Republic (CAR).
Since its arrival in CAR in late 2017, the Kremlin-backed Wagner Group and companies formerly controlled by the now-deceased Yevgeny Prigozhin have established a vast security and business network in CAR, among other African counties. This network has advanced Russia’s destabilizing activities at the expense of CAR’s sovereignty, including the Wagner Group’s destructive operations and Wagner Group-linked companies’ involvement in illicit gold and diamond mining and logging. OFAC has taken previous action against several Wagner Group-linked companies in CAR, including Lobaye Invest, Midas Ressources SARLU, and Bois Rouge SARLU (Bois Rouge), now known as Wood International Group SARLU.
The following entity has been added to OFAC’s SDN List:
- Mining Industries Sarlu of the Central African Republic
https://ofac.treasury.gov/recent-actions/20240530
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May 31, 2024: the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has targeted four entities associated with OFAC-designated Rayan Roshd Afzar Company (RRA) that have procured critical parts for Iran’s unmanned aerial vehicle (UAV) program. Additionally, OFAC has targeted an Iranian executive of Iran Aviation Industries Organization (IAIO), a subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) that oversees UAV manufacturers Iran Aircraft Manufacturing Industrial Company (HESA) and Qods Aviation Industries (QAI).
The following individual has been added to OFAC’s SDN List:
- Khajeh Fard, Afshin of Iran.
The following entities have been added to OFAC’s SDN List:
- Fanavarihaye Hava Pishran Sazeh Sepehr Co LLC of Iran;
- Kish Mechatronics Co of Iran;
- Mersad Mohajer Co LLC of Iran; and
- Rayan Fan Kav Andish Co of Iran.