LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE
This newsletter is a listing of the latest changes in export control regulations through November 30, 2022. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
REGULATORY UPDATES
The President
President Biden Provided Advance Notification To The U.S. Congress Of His Intent To Terminate The Designation Of Burkina Faso As A Beneficiary Sub-Saharan African Country
November 1, 2022: In accordance with section 506A(a)(3)(B) of the Trade Act of 1974, as amended (19 U.S.C. 2466a(a)(3)(B)), President Joseph Biden provided advance notification to the U.S. Congress of his intent to terminate the designation of Burkina Faso as a beneficiary sub-Saharan African country under the African Growth and Opportunity Act (AGOA).
President Biden took this step because he determined that the Government of Burkina Faso has not established, or is not making continual progress toward establishing, the protection of the rule of law and of political pluralism, as stated in the eligibility requirements of section 104 of the AGOA.
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President Biden Continues National Emergency In Sudan
November 3, 2022: 87 Fed. Reg. 66225: President Biden continued the national emergency in Sudan, declared in Executive Order 13067, as expanded by Executive Order 13400, and continue in effect beyond November 3, 2022. The situation in Darfur continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.
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President Biden Continues National Emergency With Respect To The Threat From Securities Investments That Finance Certain Companies Of The People’s Republic Of China
November 10, 2022: 87 Fed. Reg. 68017: The national emergency declared in Executive Order 13959 of November 12, 2020, expanded in scope by Executive Order 14032 of June 3, 2021, must continue in effect beyond November 12, 2022 to deal with the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States constituted by the threat from securities investments that finance certain companies of the People's Republic of China (PRC). 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 13959 with respect to the threat from securities investments that finance certain companies of the PRC and expanded in Executive Order 14032.
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President Biden Continues National Emergency In Iran
November 10, 2022: 87 Fed. Reg. 68013: President Biden has continued for 1 year the national emergency with respect to Iran declared in Executive Order 12170 of November 14, 1979, and the measures adopted on that date to deal with that emergency. The emergency declared by Executive Order 12170 is distinct from the emergency declared in Executive Order 12957 on March 15, 1995.
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President Biden Continues National Emergency Regarding The Proliferation Of Nuclear, Biological, And Chemical Weapons
November 10, 2022: 87 Fed. Reg. 68015: President Biden has continued for 1 year the national emergency with respect to the unusual and extraordinary threat to the national security, foreign policy, and economy of the United States posed by the proliferation of nuclear, biological, and chemical weapons (weapons of mass destruction) and the means of delivering such weapons.
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President Biden Continues National Emergency In Nicaragua
November 15, 2022: 87 Fed. Reg. 68589: President Biden has continued for one year the national emergency declared in Executive Order 13851 of November 27, 2018, in response to the situation in Nicaragua posing an unusual and extraordinary threat to the national security and foreign policy of the United States. The EO was augmented by the additional measures declared in Executive Order 14088 of October 24, 2022.
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U.S. Department Of Commerce, Bureau Of Industry and Security
The U.S. Department Of Commerce, Bureau Of Industry And Security Requests Comments On BIS Licensing Responsibilities And Enforcement
November 10, 2022: 87 Fed. Reg. 67867: The U.S. Department Of Commerce, Bureau Of Industry and Security requests comments on BIS licensing responsibilities and enforcement. To ensure consideration, comments regarding this proposed information collection must be received on or before January 9, 2023.
This collection of information involves ten miscellaneous activities described in Sections 744.15(b), Part 744 Supplement No. 7, paragraph (d), § 748.4, and Part 758 of the EAR that are associated with the export of items controlled by the Department of Commerce. Most of these activities do not involve the submission of documents to the BIS but instead involve the exchange of documents among parties in the export transaction to ensure that each party understands its obligations under U.S. law. Others involve writing certain export control statements on shipping documents or reporting unforeseen changes in shipping and disposition of exported commodities. These activities are needed by the Office of Export Enforcement and the U.S. Customs Service (Customs) to document export transactions, enforce the EAR and protect the National Security of the United States.
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U.S. Department Of Commerce, Bureau Of Industry and Security Updates Pakistan Due Diligence Guidance
November 17, 2022: The U.S. Department Of Commerce, Bureau Of Industry and Security updated its Pakistan due diligence guidance. Pakistan has a nuclear program and a missile program that are subject to end-use and end-user restrictions pursuant to Part 744 of the Export Administration Regulations (EAR) (15 C.F.R. Parts 730-774).
Accordingly, BIS’ guidance highlights:
- The supplemental licensing requirements applicable to exports, reexports, and transfers (in-country) of items subject to the EAR that may be destined to nuclear or missile activities;
- Restrictions on specific activities of U.S. persons; and
III. Best practices for screening customers in Pakistan to prevent the diversion of items subject to the EAR to unauthorized end uses and end users.
https://www.bis.doc.gov/index.php/policy-guidance/pakistan-due-diligence-guidance
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U.S. Department Of Commerce, Bureau Of Industry and Security Requests Comments on Entity List and Unverified List Requests
November 25, 2022: 87 Fed. Reg. 72446: The U.S. Department Of Commerce, Bureau Of Industry and Security requests comments on Entity List and Unverified List Requests. To ensure consideration, comments regarding this proposed information collection must be received on or before January 24, 2023. This collection is needed to provide a procedure for persons or organizations listed on the Entity List and Unverified List to request removal or modification of the entry that affects them.
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Department of State, Directorate of Defense Trade Controls (DDTC)
DDTC Name And Address Changes Posted To Website
November 2 through 22, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Name for the Government of the United Kingdom from “Her Majesty the Queen” to “His Majesty the King”;
- Change in Name and Ownership from II-VI Incorporated to Coherent Corp. due to acquisition;
- Change in Name and Ownership from Newman & Spurr Consultancy Limited to QinetiQ Training and Simulation Limited due to acquisition;
- Change in Name and Ownership from SETTAS sa to CASTINGPAR sa due to acquisition;
- Change in Name from L3 Technologies MAS Inc. to L3Harris MAS Inc. due to corporate rebranding;
- Change in Name from L3 MAPPS Inc. to L3Harris Mapps Inc. due to corporate rebranding;
- Change in Name and Ownership from Altran Innovación, S.L. to Capgemini España S.L. due to acquisition;
- Change in Name and Ownership from Altran Sverige AB to Capgemini Engineering Sverige AB due to acquisition;
- Change in Name from Vectrus, Inc. to V2X, Inc. due to merger;
- Change in Name and Ownership from MD Helicopters, Inc. to MD Helicopters, LLC due to acquisition;
- Due to corporate rebranding Babcock Italy entities will change names as follows:
From Elilario Italia S.p.A. to Babcock Mission Critical Services Italia S.p.A;
From Aeroveneta Societa Di Servizi Aerei SRL to Babcock Mission Critical Services Italia S.p.A.;
From Elidolomiti S.r.l. to Babcock Mission Critical Services Italia S.p.A.;
From Helicapital Inversiones Aereas S.L. to Babcock Mission Critical Services Italia S.p.A.;
From Helitalia S.p.A. to Babcock Mission Critical Services Italia S.p.A.;
From Inaer Helicopter Italia S.p.A. to Babcock Mission Critical Services Italia S.p.A.;
From Societa Aerofotogrammetrica Nazionale SRL to Babcock Mission Critical Services Italia S.p.A.;
From Inaer Helicopter S.p.A. to Babcock Mission Critical Services Italia S.p.A.;
From TASS s.r.l. to Babcock Mission Critical Services Italia S.p.A.;
From Inaer Aviation Italia Fleet S.p.A. Babcock Mission Critical Services Fleet Management S.p.A.;
- Due to corporate rebranding Babcock Portugal entities will change names as follows:
From Inaer Helicopter Portugal LDA to Babcock Mission Critical Services Portugal Unipessoal LDA;
From Helisul – Sociedade de Meios Aéreos LDA to Babcock Mission Critical Services Portugal Unipessoal LDA; and
- Change in Name from Ultra Electronics Limited to Ultra PMES Limited and Ultra Cyber Limited due to internal restructuring.
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The Department Of State Temporarily Suspends 22 CFR § 120.11(c), “The See-Through Rule” For Capacitors In USML Category XI(c)(5)
November 21, 2022: The Deputy Assistant Secretary of State for Defense Trade Controls temporarily suspended for a period of six (6) months the applicability of § 120.11(c) of the International Traffic in Arms Regulations (ITAR) for certain capacitors described in U.S. Munitions List (USML) Category XI(c)(5). The DOS assessed that it is in the security and foreign policy interests of the United States to facilitate commercial uses of certain capacitors when integrated into any item not described on the USML (for example, certain items used in energy exploration and commercial aviation). Accordingly, pursuant to ITAR § 126.2, and the DOS’s administration of the Arms Export Control Act (AECA), the Deputy Assistant Secretary of State for Defense Trade Controls ordered the temporary suspension of ITAR § 120.11(c) with respect to capacitors described in USML Category XI(c)(5) that have a voltage rating of one hundred twenty-five volts (125 V) or less and have been integrated into, and included as an integral part of, any item not described on the USML. Such articles are licensed by the Department of Commerce when integrated into, and included as an integral part of, items subject to the EAR. This temporary suspension is valid for a period of six months, from November 21, 2022 to May 21, 2022, or when terminated by notice, whichever occurs first. Capacitors described in USML Category XI(c)(5) remain subject to the controls of the ITAR in all other circumstances, including as stand-alone articles. The export, reexport, retransfer, or temporary import of technical data and defense services directly related to all defense articles described in USML Category XI(c)(5) remain subject to the ITAR. Any violation of the ITAR, including any violation of the terms and conditions of any export license issued by the Department of State prior to the temporary suspension announced herein, remains a violation of the AECA. The Department of State strongly encourages industry to disclose unauthorized exports, reexports, retransfers, or temporary imports of defense articles, including the subject capacitors, that occurred before this temporary suspension.
https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events&cat=Notice
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Suspended For 1 Year, the Republic of Cyprus Designation As An ITAR 126.1 Country
November 22, 2022: 87 Fed. Reg. 71250: On September 16, 2022, DDTC announced Secretary Blinken’s determination and certification to Congress that the Republic of Cyprus has met the necessary conditions under the National Defense Authorization Act (NDAA) for the Fiscal Year 2020 (P.L. 116-92) and the Eastern Mediterranean Security and Energy Partnership Act of 2019 (Div. J. P.L. 116-94) to allow the Department to approve exports, reexports, and transfers of defense articles to the Republic of Cyprus for Fiscal Year 2023.
In conjunction with Secretary Blinken’s decision, the Under Secretary for Arms Control and International Security suspended the policy of denial for retransfers and temporary imports destined for or originating in the Republic of Cyprus and brokering activities involving the Republic of Cyprus for Fiscal Year 2023.
Accordingly, the Department has published a Federal Register notice amending § 126.1(r) of the International Traffic in Arms Regulations (ITAR) to specify that the Republic of Cyprus’ status as a proscribed destination is suspended from October 1, 2022, through September 30, 2023. As a result of this change, certain exemptions to licensing requirements are now available for exports, reexports, retransfers, and temporary imports destined for or originating in the Republic of Cyprus and brokering activities involving the Republic of Cyprus, provided the conditions for the use of those exemptions are met.
https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_news_and_events&cat=Notice and https://www.federalregister.gov/documents/2022/11/22/2022-25541/international-traffic-in-arms-regulations-prohibited-exports-imports-and-sales-to-or-from-certain
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The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) Seeks Public Comment
November 30, 2022: 87 Fed. Reg. 73577: The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) is seeking public comment by December 30, 2022, on Commodity Jurisdiction Determinations.
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The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) Seeks Public Comment
November 30, 2022: 87 Fed. Reg. 73577: The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) is seeking public comment by December 30, 2022, on technology security/clearance plans, screening records, and non-disclosure agreements.
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November 30, 2022: The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) has updated the ITAR Redline version made available as a supporting document to 87 FR 16396, Mar. 23, 2022. This Revision 2, dated Nov. 28, 2022, adopts changes made by 87 FR 71250, Nov. 22, 2022, and limits redlines to only those changes made by the March 23 reorganization rule (i.e., changes to plain text those corrections to the original document made by Revision 1 to the ITAR Redline, dated Sept. 16, 2022).
In addition to making Revision 2 available, DDTC has updated the link to the ITAR Redline in the original announcement entitled “International Traffic in Arms Regulations: Consolidation and Restructuring of Purposes and Definitions,” dated March 22, 2022.
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U.S. Department Of Defense
DOD Releases Zero Trust Strategy And Roadmap
November 7, 2022: The U.S. Department of Defense (DoD) has released the DoD Zero Trust Strategy and Roadmap. Current and future cyber threats and attacks drive the need for a Zero Trust approach that goes beyond the traditional perimeter defense approach. The Department intends to implement distinct Zero Trust capabilities and activities as outlined in the strategy and associated Roadmap by FY27. The strategy envisions a DoD Information Enterprise secured by a fully implemented, Department-wide Zero Trust cybersecurity framework that will reduce the attack surface, enable risk management and effective data-sharing in partnership environments, and quickly contain and remediate adversary activities. The strategy outlines four high-level and integrated strategic goals that define what the Department will do to achieve its vision for ZT:
- Zero Trust Cultural Adoption – All DoD personnel are aware, understand, trained, and committed to a Zero Trust mindset and culture and support integration of ZT.
- DoD information Systems Secured and Defended – Cybersecurity practices incorporate and operationalize Zero Trust in new and legacy systems.
- Technology Acceleration – Technologies deploy at a pace equal to or exceeding industry advancements.
- Zero Trust Enablement – Department- and Component-level processes, policies, and funding are synchronized with Zero Trust principles and approaches.
Implementing Zero Trust will be a continuous process in the face of evolving adversary threats and new technologies. Additional Zero Trust enhancements will be incorporated in subsequent years as technology changes and U.S. adversaries evolve.
https://dodcio.defense.gov/Portals/0/Documents/Library/DoD-ZTStrategy.pdf
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DSCA Notification to Congress of Foreign Military Sale To The Government Of Belgium Of AIM-120C-8 Advanced Medium Range Air-To-Air Missiles
November 8, 2022: The Department of State has made a determination approving a possible Foreign Military Sale to the Government of Belgium of AIM-120C-8 Advanced Medium Range Air-to-Air Missiles (AMRAAM) and related equipment for a total estimated cost of $380 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale on November 8, 2022.
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DSCA Notification to Congress of Foreign Military Sale To The Government Of Lithuania Of M142 High Mobility Artillery Rocket System
November 9, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Lithuania of M142 High Mobility Artillery Rocket System (HIMARS) Launchers and related equipment for an estimated cost of $495 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.
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DSCA Notification to Congress of Foreign Military Sale To The Government Of Oman Of Joint Stand Off Weapons
November 9, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Oman of Joint Stand Off Weapons (JSOW) and related equipment for an estimated cost of $385 million. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.
https://www.dsca.mil/press-media/major-arms-sales/oman-joint-stand-weapons-jsow
DSCA Notification to Congress of Foreign Military Sale To The Government Of Qatar Of The Fixed Site-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System
November 29, 2022: The State Department has made a determination approving a possible Foreign Military Sale to the Government of Qatar of the Fixed Site-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System (FS-LIDS) System of Systems and related equipment for an estimated cost of $1 billion. The Defense Security Cooperation Agency (DSCA) delivered the required certification notifying Congress of this possible sale.
https://www.dsca.mil/sites/default/files/mas/Press%20Release%20-%20Qatar%2022-36%20CN.pdf
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Department of the Treasury
Treasury Announced Availability Of CFIUS Enforcement And Penalty Guidelines
November 2, 2022: 87 Fed. Reg. 66220: The Office of Investment Security, Department of the Treasury, announced the availability of the Committee on Foreign Investment in the United States (CFIUS) Enforcement and Penalty Guidelines. These guidelines provide the public with a summary of CFIUS's practice regarding penalties and other remedies for violations of section 721 of the Defense Production Act of 1950 as amended (Section 721), the regulations promulgated thereunder, or mitigation agreements, conditions, or orders pursuant thereto (Violations).
CFIUS may impose civil penalties for the following:
- Failure to File. Failure to timely submit a mandatory declaration or notice, as applicable.
- Non-Compliance with CFIUS Mitigation. Conduct that is prohibited by or otherwise fails to comply with CFIUS mitigation agreements, conditions, or orders (“CFIUS Mitigation”).
- Material Misstatement, Omission, or False Certification. Material misstatements in or omissions from information filed with CFIUS and false or materially incomplete certifications filed in connection with assessments, reviews, investigations, or CFIUS Mitigation, including information provided during informal consultations or in response to requests for information.
The text of the CFIUS Enforcement Guidelines is available in its entirety on the CFIUS section of the Treasury Department's website at https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius/cfius-enforcement-and-penalty-guidelines.
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Census Bureau
Census Deletes Port Of Export Codes
November 2, 2022: The U.S. Census Bureau deleted the following Port of Export Codes for Automated Export System (AES) / Electronic Export Information (EEI) filing:
- 2781 Palm Springs User Fee, LAX, CA;
- 2782 San Bernardino International Airport; and
- 3707 Sheboygan, WI.
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U.S. Census Bureau Tips on How to Resolve AES Response Messages
November 22, 2022: 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 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: 600
Narrative: Vehicle ID Qualifier Must be V or P
Severity: Fatal
Reason: The Vehicle ID Qualifier was not reported.
Resolution: The Vehicle ID Qualifier identifies the type of used vehicle number reported on the shipment. The Vehicle ID Qualifier must be either V for Vehicle Identification Number (VIN) or P for Product Identification Number (PIN).
Verify the Vehicle ID Qualifier, correct the shipment and resubmit.
Response Code: 856
Narrative: Improbable ISO
Severity: Verify
Reason: The ISO Country Code reported may not be valid for the Country of Destination.
Resolution: Valid ISO Country Codes reportable in AES are contained in Appendix C – ISO Country Codes.
Verify the ISO Country Code, correct the shipment and resubmit.
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Federal Communications Commission
The Federal Communications Commission (FCC) Bans The Import Of Communications Equipment From Huawei Technologies, ZTE Corporation, Hytera Communications, Hangzhou Hikvision Digital Technology, and Dahua Technology (and their subsidiaries and affiliates).
November 25, 2022: The Federal Communications Commission (FCC) adopted new rules prohibiting communications equipment deemed to pose an unacceptable risk to national security from being authorized for importation or sale in the United States. This is the latest step by the Commission to protect our nation’s communications networks. In recent years, the Commission, Congress, and the Executive Branch have taken multiple actions to build a more secure and resilient supply chain for communications equipment and services within the United States.
The Report and Order apply to future authorizations of equipment identified on the Covered List published by the FCC’s Public Safety and Homeland Security Bureau pursuant to the Secure and Trusted Communications Networks Act of 2019. The new rules prohibit the authorization of equipment through the FCC’s Certification process and make clear that such equipment cannot be authorized under the Supplier’s Declaration of Conformity process or be imported or marketed under rules that allow exemption from an equipment authorization. The Covered List (which lists both equipment and services) currently includes communications equipment produced by Huawei Technologies, ZTE Corporation, Hytera Communications, Hangzhou Hikvision Digital Technology, and Dahua Technology (and their subsidiaries and affiliates). The new rules implement the directive in the Secure Equipment Act of 2021, signed into law by President Biden last November that requires the Commission to adopt such rules.
file:///C:/Users/jherzo/Downloads/DOC-389524A1.pdf and file:///C:/Users/jherzo/Downloads/FCC-22-84A1.pdf
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U.S. Customs & Border Protection
U.S. Customs & Border Protection Launched Updates To The ACE Automated Systems Homepage
November 2, 2022: U.S. Customs and Border Protection (CBP) launched of updates to the ACE and Automated Systems homepage. While users will continue to have access to all the latest information about the Automated Commercial Environment (ACE), the updated website will offer a streamlined organization of ACE resources and fewer clicks for users to access the information they need. In particular, the coming update will include a new “How to Use ACE” page, providing an overview of the ACE Portal and ACE electronic data interchange (EDI) processing and giving users a single location to access all related resources. Any links or bookmarks to URLs that are no longer in service will be redirected to the upgraded resource page.
https://content.govdelivery.com/bulletins/gd/USDHSCBP-33596f5?wgt_ref=USDHSCBP_WIDGET_2
| LATEST SANCTIONS FINES & PENALTIES |
This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don't let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.
Sanctions
Department of Commerce, Bureau of Industry and Security (BIS)
November 8, 2022: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) extended the temporary denial order against Mahan Airways, Pejman Mahmood Kosarayanifard, Mahmoud Amini, Kerman Aviation, Sirjanco Trading LLC, Mahan Air General Trading LLC, Mehdi Bahrami, Al Naser Airlines, Ali Abdullah Alhay, Bahar Safwa General Trading, Sky Blue Bird Group, and Issarn Shammout for 180 days.
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November 21, 2022: 87 Fed. Reg. 70780: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued an Order Renewing the Temporary Denial of Export (TDO) privileges of Rossiya Airlines of Russia based on BIS' evidence and related investigation indicated that after the issuance of the TDO, Rossiya continued to fly aircraft into Russia in violation of the EAR including flights from Antalya and Istanbul, Turkey. Rossiya has continued to operate aircraft subject to the EAR, which was flown into Russia on or after March 2, 2022, on flights within Russia, including, but not limited to, between such cities as Anadyr, Russia; Kaliningrad, Russia; Khaborovsk, Russia; Magadan, Russia; and Moscow, Russia, in violation of Section 736.2(b)(10) of the EAR.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
November 3, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated members of an international oil smuggling network that facilitated oil trades and generated revenue for Hizballah and the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The network being designated includes several key individuals and numerous front companies and vessels involved in blending oil to conceal the Iranian origins of the shipments and exporting it around the world in support of Hizballah and the IRGC-QF.
The following individuals have been added to OFAC's SDN List:
- Artemov, Viktor Sergiyovich of the Ukraine;
- El Zein, Mohamed of Iran;
- Fazzone, Gregorio of Switzerland;
- Nafrieh, Edman of Iran;
- Ryabikova, Tatiana of France; and
- Zahedi, Rouzbeh of Iran.
The following entities have been added to OFAC's SDN List:
- Al Hakeel Al Aswad Oil Trading LLC of the United Arab Emirates;
- Ava Petroleum Services S.A. of Switzerland;
- Azul Vista Shipping Corporation of the Marshall Islands;
- Blue Berri Shipping Inc. of the Marshall Islands;
- Centrum Maritime PTE. LTD. of Singapore;
- Energotrade Plus Dmcc of the United Arab Emirates;
- Expanse Ship Management Limited of Turkey;
- Gilda Tar Karvan International Company of Iran;
- Harbour Ship Management Limited of the Marshall Islands;
- Intrepid Navigators S.A., of the Marshall Islands;
- Monumont Ship Management Limited of the Marshall Islands;
- Petro Naviero PTE. LTD. of Singapore;
- Pontus Navigation Corp. of the Marshall Islands;
- Rising Tide Shipping Corp. of the Marshall Islands;
- Technology Bright International Limited of the Marshall Islands;
- Triton Navigation Corp. of the Marshall Islands; and
- Vista Clara Shipping Corporation of the Marshall Islands.
The following vessels have been added to OFAC's SDN List:
- Adisa Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9304667;
- B Luminosa Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9256016;
- Bluefins Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9221657;
- Boceanica Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9267132;
- Bueno Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9282443;
- Julia A (f.k.a. AZUL) Oil Products Tanker Liberia flag; Vessel Registration Identification IMO 9236353;
- Lara I (f.k.a. CLARA) Oil Products Tanker Liberia flag; Vessel Registration Identification IMO 9231767;
- Nolan (f.k.a. OSLO) Oil Products Tanker Panama flag; Vessel Registration Identification IMO 9179701;
- Rain Drop Crude Oil Tanker Cook Islands flag; Vessel Registration Identification IMO 9233208;
- Young Yong Oil Products Tanker Djibouti flag; Vessel Registration Identification IMO 9194127; and
- Zephyr I (f.k.a. ZHEN I) Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9255880.
https://home.treasury.gov/news/press-releases/jy1076 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221103
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November 4, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), along with the Government of Canada, designated Haitian nationals Joseph Lambert (Lambert) and Youri Latortue (Latortue) pursuant to Executive Order 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade.” OFAC designated Lambert and Latortue for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. Lambert is the sitting President of the Haitian Senate and has held political positions in Haiti for 20 years. Latortue is a former Haitian Senator and a longtime politician.
The following individuals have been added to OFAC's SDN List:
- Lambert, Joseph of Haiti; and
- Latortue, Youri of Haiti.
https://home.treasury.gov/news/press-releases/jy1080 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221104
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November 7, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four members of an Islamic State of Iraq and Syria (ISIS) cell operating in South Africa who have provided technical, financial, or material support to the terrorist group. Treasury also designated eight companies owned, controlled, or directed by the individuals in this ISIS cell. ISIS continues to expand its terrorist network across the continent, as evidenced by the July 2022 United Nations Security Council report that highlighted the emerging importance of the country for funds transfers from ISIS leadership to ISIS affiliates across Africa. Treasury remains committed to exposing and disrupting terrorist financing on the African continent.
The following individuals have been added to OFAC's SDN List:
- Akbar, Mohamad of South Africa;
- Akbar, Nufael of South Africa;
- Akbar, Umar of South Africa; and
- Akbar, Yunus Mohamad of South Africa.
The following entities have been added to OFAC’s SDN List:
- Ashiq Jewellers CC of South Africa;
- Bailey Holdings PTY LTD of South Africa;
- Flexoseal Waterproofing Solutions PTY LTD of South Africa;
- HJ Bannister Construction CC of South Africa;
- Ineos Trading PTY LTD of South Africa;
- Ma Gold Traders PTY LTD of South Africa;
- Shaahista Shoes CC of South Africa; and
- Sultan's Construction CC of South Africa.
https://home.treasury.gov/news/press-releases/jy1084 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221107
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November 8, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating two individuals for engaging in transportation and procurement activities on behalf of the Democratic People’s Republic of Korea (DPRK). These individuals have acted on behalf of Air Koryo, an entity previously designated by OFAC for operating in the transportation industry in the DPRK economy. OFAC also delisted and simultaneously redesignated Tornado Cash under Executive Order (E.O.) 13722 and E.O. 13694, as amended. The redesignation takes into account additional information and also includes an additional basis for the designation of Tornado Cash regarding its support for DPRK activities. Tornado Cash, an entity that provides virtual currency mixing services, obfuscated the movement of over $455 million stolen in March 2022 by the OFAC-designated, DPRK-controlled Lazarus Group in the largest known virtual currency heist to date. OFAC also issued a new Frequently Asked Question (FAQ) to provide additional compliance guidance regarding the nature of the Tornado Cash entity, and updated three existing FAQs with additional guidance.
The following individuals have been added to OFAC's SDN List:
- Oo, Kyaw Min, Yangon of Burma;
- Ri, Sok, Dandong of China and North Korea; and
- Yan, Zhiyong of China.
The following entities have been added to OFAC’s SDN List:
- Sky Aviator Company Limited of Burma; and
- Tornado Cash (See link below for Digital Currency Addresses associated with Tornado Cash.
Additional Frequently Asked Questions:
Answer: A “person” subject to designation under E.O. 13722 or E.O. 13694, as amended, includes an individual or an entity defined as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.” Once OFAC has determined that a person is subject to sanctions, OFAC adds that person to the Specially Designated Nationals and Blocked Persons List.
OFAC designated the entity known as Tornado Cash, which is a “partnership, association, joint venture, corporation, group, subgroup, or other organization” that may be designated pursuant to IEEPA. Tornado Cash’s organizational structure consists of: (1) its founders and other associated developers, who together launched the Tornado Cash mixing service, developed new Tornado Cash mixing service features, created the Tornado Cash Decentralized Autonomous Organization (DAO), and actively promoted the platform’s popularity in an attempt to increase its user base; and (2) the Tornado Cash DAO, which is responsible for voting on and implementing new features created by the developers. Tornado Cash uses computer code known as “smart contracts” to implement its governance structure, provide mixing services, offer financial incentives for users, increase its user base, and facilitate the financial gain of its users and developers. OFAC has not designated Tornado Cash’s individual founders, developers, members of the DAO, or users, or other persons involved in supporting Tornado Cash at this time. However, all Tornado Cash property and interests in property are blocked, and U.S. persons cannot transact with Tornado Cash or deal in its property and interests in property absent authorization from OFAC. See FAQs 1077 and 1078.
Amended Frequently Asked Questions:
Question 1076: What is prohibited as a result of OFAC’s designation of Tornado Cash?
Answer: On August 8, 2022, OFAC designated the entity Tornado Cash pursuant to Executive Order (E.O.) 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, a North Korea state-sponsored hacking group that was sanctioned in 2019. On November 8, 2022, OFAC simultaneously designated Tornado Cash pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of the Government of North Korea and redesignated Tornado Cash pursuant to E.O. 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, and as such the August 8, 2022 designation of Tornado Cash is no longer operative and is wholly replaced. As described in FAQs 561 and 562, OFAC may include identifiers on the Specially Designated Nationals and Blocked Persons List (SDN List) specific virtual currency wallet addresses associated with blocked persons. As part of the SDN List entry for Tornado Cash, OFAC included as identifiers certain virtual currency wallet addresses associated with Tornado Cash, as well as the URL address for Tornado Cash’s website. The Tornado Cash website has since been deleted from the Internet, but it currently remains available through certain Internet archives.
While engaging in any transaction with Tornado Cash or its blocked property or interests in property is prohibited for U.S. persons, interacting with open-source code itself in a way that does not involve a prohibited transaction with Tornado Cash is not prohibited. For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others to view, as well as discussing, teaching about, or including open-source code in written publications, such as textbooks, absent additional facts. Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Internet archives for the Tornado Cash historical website, nor would they be prohibited from visiting the Tornado Cash website if it again becomes active on the Internet.
Question 1078: Do OFAC reporting obligations apply to “dusting” transactions?
Answer: OFAC is aware of reports following the August 8, 2022 designation of Tornado Cash that certain U.S. persons may have received unsolicited and nominal amounts of virtual currency or other virtual assets from Tornado Cash smart contracts, a practice commonly referred to as “dusting.” Technically, OFAC’s regulations would apply to these transactions. To the extent, however, these “dusting” transactions have no other sanctions nexus besides Tornado Cash, OFAC will not prioritize enforcement against the delayed receipt of initial blocking reports and subsequent annual reports of blocked property from such U.S. persons. Persons who received a “dusting” transaction can also apply to OFAC for a specific license.
For guidance related to filing an initial and annual report of blocked property, please see FAQs 49, 50, and 646, respectively, and 31 C.F.R. § 501.603. Please note that the annual filing requirement for 2022 applies only to persons holding blocked property as of June 30 of this year.
Answer: For transactions involving Tornado Cash that were initiated prior to its designation on August 8, 2022, but not completed by the date of designation, U.S. persons or persons conducting transactions within U.S. jurisdiction may request a specific license from OFAC to engage in transactions involving the subject virtual currency. Applicants should be prepared to provide, at a minimum, all relevant information regarding these transactions with Tornado Cash, including the wallet addresses for the remitter and beneficiary, transaction hashes, the date and time of the transaction(s), as well as the amount(s) of virtual currency. OFAC would have a favorable licensing policy towards such applications, provided that the transaction did not involve other sanctionable conduct.
In order to apply for a specific license to complete a transaction or withdraw virtual currency involving Tornado Cash that was deposited prior to its designation or to engage in other transactions or dealings with Tornado Cash, you are encouraged to file a licensing request by visiting the following link: https://home.treasury.gov/policy-issues/financial-sanctions/ofac-license-application-page.
https://home.treasury.gov/news/press-releases/jy1087 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221108 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-11-08 and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/updated/2022-11-08
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November 9, 2022: In coordination with partners in the Netherlands and the United Kingdom (UK), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Alex Adrianus Martinus Peijnenburg (Peijnenburg), Martinus Pterus Henri De Koning (De Koning), Matthew Simon Grimm (Grimm), and nine entities pursuant to Executive Order (E.O.) 14059 for supplying illicit fentanyl, synthetic stimulants, cannabinoids, and opioids to U.S. markets through internet sales and a host of shell companies. This action represents the first use of E.O. 14059 to target those involved in the sale of illicit drugs purchased online and via darknet marketplaces.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated two business associates of a sanctioned al-Qa’ida financial facilitator and external operations plotter. The two individuals designated are Mohamad Irshad Mohamad Haris Nizar and Musab Turkmen, who conducted businesses activities to assist Ahmed Luqman Talib (Talib), who was previously designated by OFAC for facilitating the international movement of individuals and finances in furtherance of al-Qa’ida’s objectives. Australian authorities arrested Talib on March 25, 2021, and days later charged him with plotting incursions into foreign states for the purpose of engaging in hostile activities.
The following individuals have been added to OFAC's SDN List:
- De Koning, Martinus Pterus Henrikus of The Netherlands;
- Grimm, Matthew Simon of the United Kingdom and The Netherlands including his Digital Currency Addresses;
- Haris Nizar, Mohamad Irshad Mohamadof Sri Lanka;
- Peijnenburg, Alex Adrianus Martinus of The Netherlands including his Digital Currency Addresses; and
- Turkmen, Musab of Turkey.
The following entities have been added to OFAC's SDN List:
- A.M. Peijnenburg Holding B.V. of The Netherlands;
- Bellizo, Huygensstraat of The Netherlands;
- Best Sport Company B.V. of The Netherlands;
- Best Sport Company of The Netherlands;
- Erjm Limited of the United Kingdom;
- Green District B.V. of The Netherlands;
- King Trade B.V. of The Netherlands;
- Natural Gifts B.V. of The Netherlands; and
- Organic District B.V. of The Netherlands.
https://home.treasury.gov/news/press-releases/jy1089 and https://home.treasury.gov/news/press-releases/jy1088 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221109
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November 10, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 8D, "Authorizing Transactions Related to Energy." 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, May 15, 2023:
(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) 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
(8) 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 above unless separately authorized.
Effective November 10, 2022, General License No. 8C, dated June 14, 2022, is replaced and superseded in its entirety by this General License No. 8D.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221110_44 and https://home.treasury.gov/system/files/126/russia_gl8d.pdf
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November 10, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 53 "Authorizing Transactions for Diplomatic Missions of the Russian Federation Prohibited by Directive 4 under Executive Order 14024", and publishing one Russia-related Frequently Asked Question (1096).
Russia-related General License 53: U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation (“Russian missions”), where the transactions are prohibited by Directive 4 under Executive Order (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.
U.S. persons are authorized to engage in all transactions ordinarily incident and necessary to the compensation of employees of Russian missions, including payment of salaries and reimbursement of expenses, where the transactions are prohibited by Directive 4 under E.O. 14024.
This general license does not authorize:
(1) 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
(2) 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.
Question 1096: Do U.S. sanctions prohibit U.S. persons from engaging in transactions that are ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation located in or outside the United States?
Answer: OFAC issued Russia-related General License (GL) 53 to authorize U.S. persons to engage in all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation (“Russian missions”), where the transactions are prohibited by Directive 4 under Executive Order (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. This authorization applies to transactions related to Russian missions located in or outside the United States. For example, GL 53 authorizes the payment of salaries to employees of Russian missions that may otherwise be prohibited by Directive 4, such as a payment originated by the Ministry of Finance of the Russian Federation from a non-blocked Russian bank. Importantly, GL 53 does not authorize any transactions involving blocked persons, including blocked Russian financial institutions; nor does it authorize debits to the accounts on the books of U.S. financial institutions of entities subject to Directive 4. Non-U.S. persons may engage in transactions that are authorized for U.S. persons under this GL without risk of sanctions under E.O. 14024.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221110_33 and https://home.treasury.gov/system/files/126/russia_gl53.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1096
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November 14, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), alongside the U.S. Department of State, sanctioned a transnational network procuring technology that supports the Russian military-industrial complex. OFAC also designated a global network of financial facilitators, enablers, and others associated with two key Kremlin-linked elites whose fortunes are intertwined with the West. In total, OFAC’s actions designated 14 individuals and 28 entities, and identified eight aircraft as blocked property.
The following individuals have been added to OFAC's SDN List:
- Aliev, Murat Magomedovich of Russia;
- Gadzhiev, Nariman Gadzhievich of Switzerland; United Arab Emirates; Saint Kitts and Nevis; and Russia;
- Katz, Laurin of Switzerland;
- Kerimov, Said Suleymanovich of Russia;
- Kerimova, Amina Suleymanovna of Russia;
- Kerimova, Firuza Nazimovna of Russia;
- Kerimova, Gulnara Suleymanovna of Russia;
- Leng, Holger of Estonia and Switzerland;
- Pasche, Jacques of Switzerland;
- Pavlyuk, Mikhail Ilyich of Armenia and Russia;
- Rettich, Inga of Switzerland and Cyprus;
- Studhalter, Alexander-Walter of Switzerland; United Kingdom; Luxembourg; Spain; Germany; and France;
- Studhalter, Hugo Ange Christophe of France and Switzerland; and
- Studhalter, Jeremy Eric Camille of France and Switzerland.
The following entities have been added to OFAC's SDN List:
- Adorabella AG of Russia and Switzerland;
- Alstone Investment AG of France and Switzerland;
- Bonum Capital Cyprus LTD of Cyprus;
- Bonum Capital Investors Corp of the British Virgin Islands;
- Chlodwig Enterprises AG of Russia and Switzerland;
- Constellation Advisors LTD of the United Arab Emirates;
- Emperor Aviation LTD of Russia;
- Eurimo Holding SA of Luxembourg;
- JSC Pkk Milandr of Russia;
- Limited Liability Company Aviakompaniya Dalnevostochnaya KSM of Russia;
- Limited Liability Company Bonum Capital of Russia;
- Limited Liability Company Bonum Investments of Russia;
- Limited Liability Company Bonum Management of Russia;
- Limited Liability Company Rb-Esteit of Russia;
- MG International AG of Russia and Switzerland;
- Milur Electronics LLC of Armenia;
- Milur SA of Switzerland;
- Papa Oscar Ventures GMBH of Germany;
- Papa Oscar Ventures SE SL of Spain;
- SCI AAA Properties of France;
- Service Immobiliere Antibes SAS of France;
- Service Immobiliere Et Gestion SAS of France;
- Sharp Edge Engineering Inc. of Taiwan;
- Studhalter International Group AG of Switzerland;
- Swiss International Advisory Group AG of Switzerland;
- Swiss International Real Estate Portfolio AG of Switzerland;
- VH Antibes SAS of France; and
- Villa Lexa Estates SAS of France.
The following aircraft have been added to OFAC’s SDN List:
- Aircraft Tail Number 9H-AMN; Aircraft Model BD-700-1A11;
- Aircraft Tail Number 9H-ARK; Aircraft Model BD-700-1A10;
- Aircraft Tail Number 9H-EAA; Aircraft Model Citation XLS+;
- Aircraft Tail Number 9H-MAO; Aircraft Model BD-700-1A10;
- Aircraft Tail Number 9H-OKO; Aircraft Model G650;
- Aircraft Tail Number 9H-SIS; Aircraft Model CL-600-2B16 (604 Variant);
- Aircraft Tail Number 9H-SSK; Aircraft Model G650; and
- Aircraft Tail Number 9H-TIO; Aircraft Model BD-700-1A11.
OFAC also issued Russia-related General License 40C "Civil Aviation Safety." All transactions ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving one or more of the blocked entities that are prohibited by Executive Order (E.O.) 14024 are authorized, provided that:
(1) The aircraft is registered in a jurisdiction solely outside of the Russian Federation; and
(2) The goods, technology, or services that are provided, exported, or reexported are for use on aircraft operated solely for civil aviation purposes.
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 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 entities unless separately authorized.
https://home.treasury.gov/news/press-releases/jy1102 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221114 and https://home.treasury.gov/system/files/126/russia_gl40c.pdf
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November 15, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning firms involved in the production or ongoing transfer to Russia of Iranian unmanned aerial vehicles (UAVs), which Russia has used in devastating attacks against civilian infrastructure in Ukraine. OFAC is designating Shahed Aviation Industries Research Center, the firm responsible for the design and production of Shahed-series UAVs being used by Russian forces in Ukraine. OFAC is also targeting Success Aviation Services FZC, and I Jet Global DMCC for facilitating the transfer of Iranian UAVs to Russia. The U.S. Department of State is concurrently designating Russian Private Military Company “Wagner” (PMC Wagner) and Iran’s Islamic Revolutionary Guard Corps Aerospace Force (IRGC ASF) and Qods Aviation Industries pursuant to Executive Order (E.O.) 14024. To supplement the U.S. Department of State’s designation of PMC Wagner, OFAC is also designating two individuals for facilitating PMC Wagner’s acquisition of UAVs from Iran, Abbas Djuma and Tigran Khristoforovich Srabionov.
The following individuals have been added to OFAC's SDN List:
- Djuma, Abbas of Russia; and
- Srabionov, Tigran Khristoforovich of Russia.
The following entities have been added to OFAC's SDN List:
- I Jet Global DMCC of the United Arab Emirates;
- Shahed Aviation Industries Research Center of Iran; and
- Success Aviation Services FZC of the United Arab Emirates.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Counter Terrorism General License 21 "Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels," and publishing one Counter Terrorism Frequently Asked Question (1097).
General License 21: All transactions that are ordinarily incident and necessary to one of the following activities involving the persons or vessels described below that are prohibited by the Global Terrorism Sanctions Regulations, 31 CFR part 594 (GTSR), are authorized through 12:01 a.m. eastern standard time, December 15, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the GTSR:
(1) The safe docking and anchoring of any of the blocked vessels listed in paragraph (b) of this general license (“blocked vessels”) in port;
(2) The preservation of the health or safety of the crew of any of the blocked vessels; and
(3) Emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels.
The authorization of this general license applies to the following blocked persons and vessels listed on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List and any entity in which any of the following persons own, directly or indirectly, a 50 percent or greater interest:
- Artemov, Victor Sergioyovich;
- Azul Vista Shipping Corp.;
- Harbour Ship Management Limited;
- Pontus Navigation Corp.;
- Triton Navigation Corp.; and
- Vista Clara Shipping Corp.
Question 1097: What does Counterterrorism-related General License 21 (GL 21) authorize?
Answer: GL 21 authorizes all activities otherwise prohibited by the Global Terrorism Sanctions Regulations (GTSR), 31 CFR part 594, that are ordinarily incident and necessary to the limited safety and environmental activities described in paragraph (a) of GL 21 involving certain blocked persons and vessels through 12:01 a.m. eastern standard time, December 15, 2022. GL 21 does not authorize the offloading of any cargo onboard any of the blocked vessels listed in GL 21, and any payment of claims to or for the benefit of any blocked persons or vessels would require a specific license from OFAC.
After the expiration of GL 21, U.S. persons will be prohibited from engaging in any transactions with the blocked persons or vessels listed in GL 21, unless otherwise exempt or authorized by OFAC. U.S. persons unable to conclude transactions authorized by GL 21 before 12:01 a.m. eastern standard time, December 15, 2022, are encouraged to seek guidance from OFAC.
Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to sanctions for engaging in transactions with blocked persons where those transactions would not require a specific license if engaged in by a U.S. person. Non-U.S. persons unable to conclude transactions authorized by GL 21 before 12:01 a.m. eastern standard time, December 15, 2022, are encouraged to seek guidance from OFAC.
https://home.treasury.gov/news/press-releases/jy1104 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221115 and https://home.treasury.gov/system/files/126/ct_gl21.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1097
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November 16, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating six senior employees of the Islamic Republic of Iran Broadcasting (IRIB), the Iranian state-run media corporation that has broadcast hundreds of forced confessions of Iranian, dual national, and international detainees in Iran. Designated in 2013, IRIB and its subsidiaries act not as objective media outlets but rather as a critical tool in the Iranian government’s mass suppression and censorship campaign against its own people. IRIB has produced and recently broadcast televised interviews of individuals being forced to confess that their relatives were not killed by Iranian authorities during nationwide protests but died due to accidental, unrelated causes.
The following individuals have been added to OFAC's SDN List:
- Barmahani, Mohsen of Iran;
- Jebelli, Peyman of Iran;
- Noroozi, Ahmad of Iran;
- Pouranvari, Yoosef of Iran;
- Rezvani, Ali of Iran; and
- Zabihpour, Ameneh Sadat of Iran.
https://home.treasury.gov/news/press-releases/jy1109 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221116
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November 17, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 13 companies in multiple jurisdictions facilitating the sale of hundreds of millions of dollars worth of Iranian petrochemicals and petroleum products to buyers in East Asia on behalf of sanctioned Iranian petrochemical brokers Persian Gulf Petrochemical Industry Commercial Co. (PGPICC) and Triliance Petrochemical Co. Ltd. (Triliance), as well as the National Iranian Oil Company (NIOC) and its marketing arm, Naftiran Intertrade Company Ltd. (NICO). This action, the fifth round of designations targeting Iran’s illicit petroleum and petrochemical trade since June 2022, demonstrates OFAC’s determination to target sanction evasion efforts.
OFAC also designated La Nueva Familia Michoacana and its co-leaders, Johnny Hurtado Olascoaga (Johnny Hurtado) and Jose Alfredo Hurtado Olascoaga (Jose Hurtado), pursuant to Executive Order (E.O.) 14059, for having engaged in, or attempted to engage in, activities or transactions that materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production. La Nueva Familia Michoacana smuggles illicit drugs into and throughout the United States. This organization is also behind the increasing U.S. presence of rainbow fentanyl, which, according to the U.S. Drug Enforcement Administration (DEA), appears in the form of pills/powder that comes in a variety of bright colors, shapes, and sizes and is made to attract children and young users.
The following individuals have been added to OFAC's SDN List:
- Hurtado Olascoaga, Johnny of Mexico;
- Hurtado Olascoaga, Jose Alfredo of Mexico.
The following entities have been added to OFAC’s SDN List:
- Access Technology Trading L.L.C. of the United Arab Emirates;
- Asian Zone Trading L.L.C. of the United Arab Emirates;
- Barza Style & Mode Co., Limited of China;
- East Asia Trading Import And Export Trade Co., LTD. of the Marshall Islands and China;
- Galaxy Petrochemical FZE of the United Arab Emirates;
- Highline Logistic Hk Limited of China;
- Hong Kong Aeonian Complex Co., Limited of China;
- La Nueva Familia Michoacana of Mexico;
- Monch General Trading L.L.C. of the United Arab Emirates;
- Newton Trading FZE of the United Arab Emirates;
- Sum Five Petrochemicals Trading L.L.C. of the United Arab Emirates;
- Torgan Co., Limited of China;
- Uteliz Resources Co., Limited of China; and
- Zhejiang Wonder Imp. And Exp. Co., LTD. of China.
https://home.treasury.gov/news/press-releases/jy1115 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221117 and https://home.treasury.gov/news/press-releases/jy1116
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November 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License 54. All transactions ordinarily incident and necessary to the purchase or receipt of any debt or equity securities of VEON Ltd. that are prohibited by section 1(a)(i) of Executive Order (E.O.) 14071 are authorized, provided that the debt or equity securities were issued prior to June 6, 2022. Note to paragraph All transactions ordinarily incident and necessary to facilitating, clearing, and settling of transactions authorized by this general license that are prohibited by section 1(a)(i) of E.O. 14071 are authorized. This general license does not authorize any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR), including transactions involving any person blocked pursuant to the RuHSR, unless separately authorized.
https://home.treasury.gov/system/files/126/russia_gl54.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221118_33
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November 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned one Russian national, Dmitry Kudryakov, and one Belarusian national, Iryna Litviniuk, for their role in exploiting the Guatemalan mining sector, as well as three associated entities connected with their corruption schemes. These individuals and entities are designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.
The following individuals have been added to OFAC's SDN List:
- Kudryakov, Dmitry of Russia;
- Litviniuk, Iryna of Belarus.
The following entities have been added to OFAC's SDN List:
- Compania Guatemalteca De Niquel, Sociedad Anonima of Guatemala;
- Compania Procesadora De Niquel De Izabal, S.A. of Guatemala; and
- Mayaniquel, Sociedad Anonima of Guatemala.
https://home.treasury.gov/news/press-releases/jy1118 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221118
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November 21, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Russia-related General License 13C "Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024." U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, are authorized to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under Executive Order 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities, through 12:01 a.m. eastern standard time, March 7, 2023.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221121 and https://home.treasury.gov/system/files/126/russia_gl13c.pdf
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November 21, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) has published a Determination pursuant to Executive Order (E.O.) 14071 to implement the price cap policy for crude oil of Russian Federation origin. Additionally, OFAC has published guidance on the implementation of the price cap policy for crude oil of Russian Federation origin. OFAC has also issued Russia-related General License 55, General License 56, and General License 57.
Pursuant to Sections l(a)(ii), l(b), and 5 of Executive Order (E.O.) 14071 of April 6, 2022 ("Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression"), the Secretary of the Treasury, in consultation with the Secretary of State, determined that the prohibitions in Section l(a)(ii) of E.O. 14071 shall apply to the following categories of services as they relate to the maritime transport of crude oil of Russian Federation origin (collectively, the "Covered Services"):
- Trading/commodities brokering;
- Financing;
- Shipping;
- Insurance, including reinsurance and protection and indemnity;
- Flagging; and
- Customs brokering.
As a result, the following activities are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control: the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any of the Covered Services to any person located in the Russian Federation. Notwithstanding that prohibition, the Covered Services are hereby authorized when the price of the crude oil of Russian Federation origin does not exceed the relevant price cap determined by the Secretary of the Treasury in consultation with the Secretary of State. The prohibitions on Covered Services in this determination shall take effect beginning at 12:01 a.m. eastern standard time on December 5, 2022. This determination excludes Covered Services with respect to crude oil of Russian Federation origin when such crude oil is loaded onto a vessel at the port of loading prior to 12:01 a.m. eastern standard time on December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m. eastern standard time on January 19, 2023. See the link below for the full text of the Determination.
OFAC guidance on the implementation of the price cap policy for crude oil of Russian Federation origin. The United States is part of an international coalition, including the G7, the European Union, and Australia, that has agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin (the “Price Cap Coalition”). These countries, home to many best-in-class financial and professional services, have also agreed to implement a policy with regard to a broad range of services as they relate to the maritime transport of crude oil and petroleum products of Russian Federation origin. This policy is known as the “price cap policy.” This document provides guidance on the implementation of the price cap policy for crude oil of Russian Federation origin (or “Russian oil”). OFAC anticipates publishing preliminary guidance on the implementation of the price cap policy for petroleum products of Russian Federation origin in the near future. The price cap policy is intended to maintain a reliable supply of oil to the global market while reducing the revenues the Russian Federation earns from oil after its own war of choice in Ukraine inflated global energy prices. See the link below for the full text of the guidance.
General License 55: 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, September 30, 2023, provided that the Sakalin-2 byproduct is solely for importation into Japan.
General License 56: 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 importation of crude oil into the Republic of Bulgaria, the Republic of Croatia, or landlocked European Union Member States as described in Council Regulation (EU) 2022/879 of June 3, 2022, are authorized.
General License 57: 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”) that are ordinarily incident and necessary to addressing vessel emergencies related to the health or safety of the crew or environmental protection, including safe docking or anchoring, emergency repairs, or salvage operations, are authorized.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221122 and https://home.treasury.gov/system/files/126/determination_11222022_eo14071.pdf and https://home.treasury.gov/system/files/126/price_cap_policy_guidance_11222022.pdf and https://home.treasury.gov/system/files/126/russia_gl55.pdf and https://home.treasury.gov/system/files/126/russia_gl56.pdf and https://home.treasury.gov/system/files/126/russia_gl57.pdf
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November 23, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Iranian security officials for the Iranian regime’s continued crackdown on ongoing protests throughout the country, including most recently in Kurdish areas. The Iranian regime has increased its aggressive actions against the Iranian people as part of its ongoing suppression of peaceful protests against a regime that denies human rights and fundamental freedoms to its people, especially women and girls.
The following individuals have been added to OFAC's SDN List:
- Asgari, Hassan of Iran;
- Moradi, Alireza of Iran;
- Osanloo, Mohammad Taghi of Iran.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221123 and https://home.treasury.gov/news/press-releases/jy1125
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November 26, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Venezuela-related General License 8K, "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" and Venezuela-related General License 41, "Authorizing Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela." Additionally, OFAC is issuing two new Venezuela-related Frequently Asked Questions (FAQs 1098 and 1099).
General License 8K: 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, is authorized through 12:01 a.m. eastern daylight time, May 26, 2023, for the following entities and their subsidiaries (collectively, the “Covered Entities”):
- Halliburton;
- Schlumberger Limited;
- Baker Hughes Holdings LLC; and
- Weatherford International, Public Limited Company.
General License 41: All transactions ordinarily incident and necessary to the following activities for or related to the operation and management by Chevron Corporation or its subsidiaries (“Chevron”) of Chevron’s joint ventures in Venezuela (collectively, the “Chevron JVs”) involving Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized:
(1) Production and lifting of petroleum or petroleum products produced by the Chevron JVs, and any related maintenance, repair, or servicing of the Chevron JVs;
(2) Sale to, exportation to, or importation into the United States of petroleum or petroleum products produced by the Chevron JVs, provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron;
(3) Ensuring the health or safety of personnel or the integrity of operations or assets of the Chevron JVs in Venezuela; and
(4) Purchase and importation into Venezuela of goods or inputs related to the activities described in paragraphs (a)(1)–(3) of this general license, including diluents, condensates, petroleum, or natural gas products.
Answer: Yes, provided that such goods and services are for certain activities related to the operation and management of Chevron’s joint ventures in Venezuela, as specified in GL 41. Such activities include, among others, the production and lifting of petroleum or petroleum products produced by Chevron’s JVs; related maintenance, repair, or servicing of the Chevron JVs; sale of petroleum or petroleum products to the United States produced by the Chevron JVs, provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron; the procurement and import into Venezuela of goods or other inputs for authorized activities; and the processing of payments by U.S. financial institutions related to the foregoing activities. Please see GL 41 for a complete list of authorized activities and associated conditions.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221126 and https://home.treasury.gov/system/files/126/venezuela_gl8k.pdf and https://home.treasury.gov/system/files/126/venezuela_gl41.pdf and https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-11-26
Answer: No. Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to U.S. sanctions for facilitating transactions or payments for or on behalf of, directly or indirectly, Chevron, its subsidiaries, joint ventures, or contractors that are authorized pursuant to Venezuela GL 41. Non-U.S. persons generally do not risk exposure to the U.S. blocking sanctions under the Venezuela Sanctions Regulations, 31 CFR Part 591, for engaging in transactions with blocked persons, where those transactions would not require a specific license if engaged in by a U.S. person.
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November 30, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) designated the following individuals due to their ties to international terrorism and ties to Al-Qa'ida in the Indian subcontinent.
The following individuals have been added to OFAC's SDN List:
- Deroji, Mufti Hazrat of Pakistan;
- Ghouri, Atif Yahya of Afghanistan and Pakistan;
- Maruf, Muhammad of Afghanistan and Pakistan; and
- Mehmood, Osama of Afghanistan and Pakistan.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221130
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Fines and Penalties
November 3, 2022: 87 Fed. Reg. 66259: The U.S. Department of Commerce, Bureau of Industry and Security (BIS) has denied Jose Martin Gallegos-Luevanos’ (“Gallegos-Luevanos”) export privileges under the Regulations for a period of 10 years from the date of Gallegos-Luevanos's conviction. The Office of Exporter Services has also decided to revoke any BIS-issued licenses in which Gallegos-Luevanos had an interest at the time of conviction.
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On January 6, 2020, in the U.S. District Court for the Southern District of Texas, Gallegos-Luevanos was convicted of violating 18 U.S.C. 554(a). Specifically, Gallegos-Luevanos was convicted of fraudulently and knowingly attempting to export from the United States to Mexico one Barret .50 caliber bolt rifle, three FA Cugir Romanian AK-47 rifles, seven Century Arms VSKA AK-47 rifles, one Century Arms WASR AK-47 rifle, and 85 assorted magazines, in violation of 18 U.S.C. 554. As a result of his conviction, the Court sentenced Gallegos-Luevanos to 48 months in prison, three years supervised release, and a $100 court assessment.
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November 7, 2022: The Bureau of Industry and Security, U.S. Department of Commerce (“BIS”), issued a 15-count charging letter against Mohammad Alhamra (“Alhamra”) and WEBS Electronics Trading Company LLC (“WEBS”) of the United Arab Emirates (“UAE”) have violated the Export Administration Regulations (“the Regulations” or “the EAR”). The Charging Letter alleges violations of the Export Administration Regulations (EAR) related to exports of U.S. telecommunications equipment and related commodities to Syria and Iran and misrepresentations and concealment of facts to BIS officials regarding these exports. See all 14 counts at the following link:
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November 9, 2022: The U.S. Department of Justice (DOJ) announced that Phil Pascoe, 60, of Floyds Knobs, Indiana; Monica Pascoe, 45, of Floyds Knobs, Indiana; Scott Tubbs, 59, of Georgetown, Kentucky; and Quadrant Magnetics LLC are charged with wire fraud, violations of the Arms Export Control Act, and smuggling of goods for their roles in an illegal scheme to send export-controlled defense-related technical data to China and to unlawfully supply U.S. Department of Defense (DOD) with Chinese-origin rare earth magnets for aviation systems and military items.
The indictment alleges that between January 2012 and December 2018, the defendants conspired to send approximately 70 drawings containing export-controlled technical data to a company located in China without a license from the U.S. government, in violation of the Arms Export Control Act and the International Traffic in Arms Regulations. The technical data drawings were the property of two U.S. companies and related to end-use items for aviation, submarine, radar, tank, mortars, missiles, infrared and thermal imaging targeting systems, and fire control systems for DOD.
The indictment further alleges that Quadrant Magnetics imported rare earth magnets that were smelted and magnetized by a company in China. Quadrant then sold these magnets to two U.S. companies which included them in components sold to DOD for use in the F-16, the F-18, and other defense assets in violation of the Defense Acquisition Regulations System (DFARS). Under the DFARS specialty metal clause, rare earth magnets sold to DOD must be produced and magnetized in the United States or an approved country. China is not an approved country.
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November 16, 2022: Yanjun Xu, 42, the first Chinese government intelligence officer ever to be extradited to the United States to stand trial, was sentenced in federal court in Cincinnati. Xu was sentenced to 20 years in prison. According to court documents, Xu targeted American aviation companies, recruited employees to travel to China, and solicited their proprietary information, all on behalf of the government of the People’s Republic of China (PRC). On Nov. 5, 2021, a federal jury in Cincinnati convicted Xu on all counts: conspiracy to commit economic espionage, conspiracy to commit trade secret theft, attempted economic espionage, and attempted trade secret theft.
Xu was a career intelligence officer, beginning in 2003 and rising to the rank of deputy division director at the Chinese Ministry of State Security (MSS), the intelligence and security agency for China. According to court documents and trial testimony, beginning in at least December 2013, Xu targeted specific companies in the United States and abroad that are recognized as leaders in the field of aviation.
Xu used aliases, front companies, and universities to deceive aviation employees and solicit information. He identified individuals who worked for the companies and recruited them to travel to China, often initially under the guise that they were traveling to give a presentation at a university. Xu and others paid the individuals stipends on top of covering travel costs.
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November 21, 2022: The Justice Department announced that it has reached a settlement agreement with Aero Precision LLC, a Washington state firearm manufacturer. The settlement resolves the department’s determination that Aero Precision had a policy of unlawfully screening out certain non-U.S. citizen job candidates, including asylees and refugees, in violation of the Immigration and Nationality Act (INA). Under governing law, asylees and refugees have the same eligibility to work in jobs involving access to sensitive defense-related information as U.S. citizens and lawful permanent residents, and would have to pass the same background check as other employees if an employer requires one.
The department’s investigation determined that from at least April 2020 until September 2020, Aero Precision routinely implemented a hiring policy that screened out eligible candidates who were not U.S. citizens or lawful permanent residents. Firearm manufacturers in the United States are subject to the International Traffic in Arms Regulations (ITAR), which regulate specific exports of defense articles and services. Absent State Department authorization, employers subject to these regulations must limit access to certain sensitive information to “U.S. persons,” which are defined as U.S. citizens, U.S. nationals, lawful permanent residents, asylees, and refugees. The ITAR thus does not authorize or require employers to exclude asylees and refugees from consideration and hire only U.S. citizens and lawful permanent residents. By limiting hiring to just U.S. citizens and lawful permanent residents, Aero Precision placed unnecessary hiring restrictions on its workforce. Under the settlement, Aero Precision must train staff on the requirements of the INA’s anti-discrimination provision, review its policies to ensure compliance with relevant law, and be subject to departmental monitoring and reporting requirements.
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November 28, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Payward, Inc. d/b/a Kraken ("Kraken"), a Delaware-incorporated virtual currency exchange with operations in the United States and elsewhere. Kraken agreed to remit $362,158.70 to settle its potential civil liability for apparent violations of sanctions against Iran. As part of its settlement with OFAC, Kraken also has agreed to invest an additional $100,000 in certain sanctions compliance controls. Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221128 and https://home.treasury.gov/system/files/126/20221128_kraken.pdf
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November 29, 2022: An indictment was unsealed, charging Ray Hunt, 69, of Madison County, Alabama, with federal offenses related to an illegal scheme to export U.S.-origin goods to Iran. The 15-count indictment charges the defendant with conspiracy to defraud the United States, sanctions violations, smuggling goods from the United States, and submitting false or misleading export information. According to the indictment, since at least November 2017, the defendant conspired to export U.S.-origin parts used in the oil and gas industry, including control valves and oil tubing, through his Alabama-based company, Vega Tools LLC, to customers in Iran. The defendant transshipped the goods to Iran through Turkey and the UAE to evade U.S. sanctions.
https://www.justice.gov/opa/pr/alabama-man-indicted-violating-us-sanctions-against-iran