This newsletter is a listing of the latest changes in export control regulations through October 31, 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 Terminated Designation of Afghanistan as a Major Non-NATO Ally
October 4, 2022: 87 Fed. Reg. 60057: President Biden terminated the designation of Afghanistan as a Major Non-NATO Ally of the United States for the purposes of the Act and the Arms Export Control Act (22 U.S.C. 2751 et seq.).
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President Continues National Emergency For 1 Year With Respect to Syria
October 14, 2022: 87 Fed. Reg. 62281: By Executive Order 13894, 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 situation in and in relation to Syria.
The situation in and in relation to Syria, and in particular the actions by the Government of Turkey to conduct a military offensive into northeast Syria, undermines the campaign to defeat the Islamic State of Iraq and Syria, or ISIS, endangers civilians, and further threatens to undermine the peace, security, and stability in the region, and 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 13894 of October 14, 2019, must continue in effect beyond October 14, 2022. Therefore, the President continued for one year the national emergency declared in Executive Order 13894 with respect to the situation in and in relation to Syria.
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President Continues For 1 Year the National Emergency With Respect to the Democratic Republic of the Congo
October 17, 2022: 87 Fed. Reg. 62975: The situation in or in relation to the Democratic Republic of the Congo continues to pose an unusual and extraordinary threat to the foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13413 of October 27, 2006, as amended by Executive Order 13671 of July 8, 2014, must continue in effect beyond October 27, 2022. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), President Biden continued for one year the national emergency with respect to the situation in or in relation to the Democratic Republic of the Congo declared in Executive Order 13413, as amended by Executive Order 13671.
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Department of State, Directorate of Defense Trade Controls (DDTC)
Secretary Of State Certification Of Statutory Requirements: Upcoming Change To The Policy Of Denial For The Republic Of Cyprus
September 16, 2022: Secretary Blinken has determined and certified to Congress that the Republic of Cyprus has met the necessary conditions under the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 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 FY 2023.
Therefore, in the near future, the Department will be publishing a Federal Register notice amending the International Traffic in Arms Regulations (ITAR) § 126.1(r) to specify that the policy of denial as described in § 126.1(r) shall not apply with respect to exports, reexports, and transfers to the Republic of Cyprus for FY 2023 and to specify that the Republic of Cyprus’ status as a proscribed destination is also suspended for the fiscal year 2023 with respect to exports, reexports, and transfers.
Editors note: This article was inadvertently left off of the September 2022 Newsletter.
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DDTC Name And Address Changes Posted To Website
October 4 through 11, 2022: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Change in Address for PHI International Australia Pty Ltd from 50 Kings Park Road, West Perth, Australia, 6005 to PHI International Australia Pty Ltd at Level 6, 1100 Hay Street, West Perth, Australia, 6005;
- Change in Name from Eurocopter Kingdom of Saudi Arabia to Airbus Helicopters Arabia for Aircraft Maintenance due to corporate rebranding;
- Change in Name and Ownership from Progeny Systems Corporation to Progeny Systems, LLC due to acquisition by General Dynamics Mission Systems, Inc.
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The Department Of State Issued A 60 Day Notice Of Four Proposed Information Collections
October 18, 2022: 87 Fed. Reg. 63145: The Department of State issued a 60-day notice of four proposed information collections:
- Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements;
- Maintenance of Records by DDTC Registrants
- Annual Brokering Report; and
- Brokering Prior Approval (License).
The Department of State will accept comments from the public up to December 19, 2022.
Comments may be submitted by any of the following methods:
- Web: Persons with access to the internet may comment on this notice by going to www.Regulations.gov. You can search for the document by entering “Docket Number: DOS-2022-0034” in the Search field. Then click the “Comment Now” button and complete the comment form.
- Email: DDTCPublicComments@state.gov.
- Regular Mail: Send written comments to: The public may mail comments to the Directorate of Defense Trade Controls, Department of State, 2401 E St NW, Suite H1205, Washington, DC 20522.
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Department of Commerce, Bureau of Industry and Security (BIS)
BIS Updates Policy Regarding Enforcement Of The Antiboycott Rules
October 6, 2022: 87 Fed. Reg. 60890: The Department of Commerce’s Bureau of Industry and Security (BIS) updated its policy regarding enforcement of the antiboycott rules. The amendment took effect on October 7, 2022, and clarifies the categories of antiboycott violations and their associated penalties to ensure appropriate actions are taken based on the seriousness of the violation.
Summaries of the four enhancements to strengthen the antiboycott enforcement program are below:
- Enhanced Penalties. Penalty amounts imposed will reflect BIS’s assessment of the seriousness of the violation and will be commensurate with the harm caused. Because not all antiboycott violations are equivalent in seriousness, BIS will continue to seek different levels of penalties depending on the different nature of the antiboycott violation. For the most serious violations – those in Category A under our regulations – BIS will begin its penalty calculus with the maximum penalty under the Anti-Boycott Act of 2018. BIS Antiboycott regulations have long provided for the imposition of the maximum penalty for Category A violations. All Category A violations will be subject to the maximum penalty as the starting point in our penalty calculus. For violations of Category B, penalties will be enhanced as well. Penalties must be high enough to both punish those who violate the antiboycott rules and deter those who would violate them. This means that penalties for Category C violations will also be increased.
- Reprioritized Violation Categories. BIS has revised the Antiboycott Penalty Guidance to recategorize certain antiboycott violations in a manner that reflects BIS’s current view of their relative seriousness. A rulemaking amendment to the Export Administration Regulations reprioritizing certain categories of antiboycott violations went into effect on October 7, 2022.
- Admissions of Misconduct. In the past, when BIS has resolved matters involving violations of the antiboycott rules, BIS has allowed companies to pay a reduced penalty without admitting misconduct. These “no admit/no deny” settlements had the advantage of making it easier to reach a resolution but also had two serious disadvantages. First, because there was no admission in such cases, there was no admitted statement of facts, i.e., no factual recitation making clear what got the company into trouble. Without such an admitted statement of facts, it is more difficult for other companies to learn from their peers’ mistakes and adjust their behavior accordingly. Second, companies get a significant reduction in a penalty when they resolve matters short of trial. BIS wants companies to resolve matters and want to incentivize them to do so. But in other enforcement contexts, including in BIS administrative export enforcement cases, companies must admit their conduct in order to obtain a resolution. The same will now be true in administrative antiboycott enforcement cases as well. Under the new policy, BIS will require those who enter into settlement agreements for antiboycott violations to admit to a statement of facts outlining their conduct as part of the settlement agreement.
- Renewed Focus on Foreign Subsidiaries of U.S. Companies. Violations of our antiboycott rules have traditionally resulted in consequences being imposed on the U.S. parties receiving the boycott-related requests (for complying with or failing to report receipt of such requests) and not on the parties making them. The penalties BIS imposes on U.S. recipients help to deter them from complying with boycott-related requests by attaching significant costs on the back end. But this is only one side of the equation. BIS wants to dissuade foreign parties from making those requests in the first place. Going forward, BIS will be more aggressive in exploring ways to deter foreign parties from issuing or making boycott requests of U.S. persons. In particular, BIS will bring a renewed focus to its enforcement efforts against controlled foreign subsidiaries of U.S. parent companies when they act in violation of our antiboycott regulations.
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Commerce Implements LANDMARK New Export Controls On Advanced Computing And Semiconductor Manufacturing Items to the People’s Republic of China (PRC)
October 7, 2022: 87 Fed. Reg. 62186 and 87 Fed. Reg. 61971: The Department of Commerce’s Bureau of Industry and Security (BIS) implemented a series of targeted updates to its export controls as part of BIS’s ongoing efforts to protect U.S. national security and foreign policy interests. These updates will restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications and build on prior policies, company-specific actions, and less public regulatory, legal, and enforcement actions taken by BIS. The export controls announced in the two rules restrict the PRC’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. These items and capabilities are used by the PRC to produce advanced military systems, including weapons of mass destruction; improve the speed and accuracy of its military decision-making, planning, and logistics, as well as of its autonomous military systems; and commit human rights abuses. Finally, these rules make clear that foreign government actions that prevent BIS from making compliance determinations will impact a company’s access to U.S. technology through addition to the Entity List.
BIS’s rule on advanced computing and semiconductor manufacturing addresses U.S. national security and foreign policy concerns in two key areas. First, the rule imposes restrictive export controls on certain advanced computing semiconductor chips, transactions for supercomputer end-uses, and transactions involving certain entities on the Entity List. Second, the rule imposes new controls on certain semiconductor manufacturing items and on transactions for certain integrated circuit (IC) end uses. Specifically, the rule:
1.) Adds certain advanced and high-performance computing chips and computer commodities that contain such chips to the Commerce Control List (CCL) in new ECCNs 3A090 and 4A090;
2.) Adds new license requirements for items destined for a supercomputer or semiconductor development or production end use in the PRC;
3.) Expands the scope of the Export Administration Regulations (EAR) Foreign Direct Product Rule over certain foreign-produced advanced computing items and foreign-produced items for supercomputer end uses;
4.) Expands the scope of the Foreign Direct Product Rule for foreign-produced items subjecting them to license requirements to twenty-eight existing entities on the Entity List that are located in the PRC;
5.) Adds certain semiconductor manufacturing equipment and related items to the CCL under a new ECCN 3B090;
6.) Adds new license requirements for items destined to a semiconductor fabrication “facility” in the PRC that fabricates ICs meeting specified. Licenses for facilities owned by PRC entities will face a “presumption of denial,” and facilities owned by multinationals will be decided on a case-by-case basis. The relevant thresholds are as follows:
- Logic chips with non-planar transistor architectures (I.e., FinFET or GAAFET) of 16nm or 14nm, or below;
- DRAM memory chips of 18nm half-pitch or less;
- NAND flash memory chips with 128 layers or more.
7.) Restricts the ability of U.S. persons to support the development, or production, of ICs at certain PRC-located semiconductor fabrication “facilities” without a license;
8.) Adds new license requirements to export items to develop or produce semiconductor manufacturing equipment and related items; and
9.) Establishes a Temporary General License (TGL) to minimize the short-term impact on the semiconductor supply chain by allowing specific, limited manufacturing activities related to items destined for use outside the PRC.
The rule was effective in phases after being filed for Public Inspection with the Federal Register. The semiconductor manufacturing items restrictions were effective upon filing for Public Inspection (October 7, 2022), the restrictions on U.S. persons’ ability to support the development, production, or use of ICs at certain PRC-located semiconductor fabrication “facilities” was effective five days later (October 12, 2022), and the advanced computing and supercomputer controls, as well as the other changes in the rule, was effective 14 days later (October 21, 2022). Additionally, public comments on all of these changes are due to BIS no later than 60 days from the date of Federal Register publication.
Editors Note: The requirements for compliance with the new rule is extremely complicated. If your company products or services in any way can be used in semiconductor manufacturing or advanced computing, please contract us for guidance before continuing business activities in China or Hong Kong.
Revisions to BIS’s Unverified List:
In the same rule making, BIS also updated its regulations related to BIS’s Entity List to clarify that a sustained lack of cooperation by the host government that effectively prevents BIS from determining compliance with the EAR may lead to the addition of an entity to the Entity List. The rule provides an example that stipulates that a sustained lack of cooperation by a foreign government that prevents BIS from verifying the bona fides of companies on the Unverified List (UVL) can result in those parties being moved to the Entity List. If an end-use check is not timely scheduled and completed. All additions, removals, or revisions to the Entity List are still subject to the approval of the End-User Review Committee, which is made up of the Departments of Commerce, State, Defense, and Energy pursuant to existing rules. The rule adds 31 new entities to the UVL and removes nine entities that have met relevant requirements. Consistent with this regulatory change, Export Enforcement has issued a policy memorandum Addressing Foreign Government Prevention of End-Use Checks. The policy calls for adding parties to the Unverified List 60 days after checks are requested, but host government inaction prevents their completion and an additional 60-day process for adding UVL parties to the Entity List when there is a sustained lack of cooperation by a host government to facilitate completion of the checks.
https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3158-2022-10-07-bis-press-release-advanced-computing-and-semiconductor-manufacturing-controls-final/file and https://www.federalregister.gov/documents/2022/10/13/2022-21658/implementation-of-additional-export-controls-certain-advanced-computing-and-semiconductor and https://www.federalregister.gov/documents/2022/10/13/2022-21714/revisions-to-the-unverified-list-clarifications-to-activities-and-criteria-that-may-lead-to
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BIS Adds 31 Persons To The Unverified List
October 14, 2022: 87 Fed. Reg 61971: The Department of Commerce, Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) by adding 31 persons to the Unverified List (UVL). The 31 persons were added to the UVL on the basis that BIS was unable to verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the U.S. Government's control. All 31 persons are being added under the destination of the People's Republic of China (China). This rule also removed nine persons, all under the destination of China, from the UVL because BIS was able to verify their bona fides. With this final rule, BIS also clarified the activities and criteria that may lead to the addition of an entity to the Entity List, including a sustained lack of cooperation by the host government (e.g., the government of the country in which an end-use check is to be conducted) that effectively prevents BIS from determining compliance with the EAR.
China
- Beijing Naura Magnetoelectric Technology Co., Ltd.;
- Beijing PowerMac Company;
- CCIC Southern Electronic Product Testing Co., Ltd.;
- Chang Zhou Jin Tan Teng Yuan Machinery Parts Co., Ltd.;
- Institute of Mineral Resources, Chinese Academy of Geological Sciences;
- Chinese Academy of Science (CAS) Institute of Chemistry;
- Chongqing Optel Telecom;
- Chongqing Xinyuhang Technology Co., Ltd.;
- Dandong Nondestructive Electronics;
- DK Laser Company Ltd.;
- Foshan Huaguo Optical Co., Ltd.;
- GRG Metrology & Test (Chongqing) Co., Ltd.;
- Guangdong Dongling Carbon Tech. Co., Ltd.;
- Guangxi Yuchai Machinery Co., Ltd.;
- Guangzhou GRG Metrology & Test (Beijing) Co., Ltd.;
- Jialin Precision Optics (Shanghai) Co., Ltd.;
- Lishui Zhengyang Electric Power Construction;
- Nanjing Gova Technology Co., Ltd.;
- Ningbo III Lasers Technology Co., Ltd.;
- Qingdao Sci-Tech Innovation Quality Testing Co., Ltd.;
- Shanghai Tech University;
- Suzhou Sen-Chuan Machinery Technology Co., Ltd.;
- Tianjin Optical Valley Technology Co., Ltd.;
- University of Chinese Academy of Sciences;
- University of Shanghai for Science and Technology;
- Vital Advanced Materials Co., Ltd.;
- Wuhan Institute of Biological Products Co., Ltd.;
- Wuhan Juhere Photonic Tech Co., Ltd.;
- Wuxi Hengling Technology Co., Ltd.;
- Xian Zhongsheng Shengyuan Technology Co., Ltd.; and
- Yangtze Memory Technologies Co., Ltd.
This final rule removed nine persons from the UVL after BIS was able to verify their bona fides. This rule removed:
- Anhui Institute of Metrology;
- Chuzhou HKC Optoelectronics Technology Co., Ltd.;
- Hefei Anxin Reed Precision Co. Ltd.;
- Hefei Institutes of Physical Science;
- Jiutian Intelligent Equipment Co. Ltd.;
- Suzhou Gyz Electronic Technology Co. Ltd.;
- Suzhou Lylap Mould Technology Co Ltd.;
- Wuxi Biologics Co., Ltd.; and
- Wuxi Turbine Blade Co., Ltd.
The inability of BIS to determine compliance with the EAR because of a host government's action or inaction creates a circumstance that may place an entity at significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. For example, as previously mentioned, BIS frequently conducts end-use checks of foreign parties to verify their bona fides, thereby mitigating the risk of diversion of items subject to the EAR. If BIS is unable to conduct timely end-use checks, BIS's ability to prevent diversion and resolve concerns about potentially problematic end uses and users is negatively impacted. The sustained and deliberate prevention of an end-use check by a foreign government is, therefore, contrary to the national security and foreign policy interests of the United States. Further, the inability of an entity to receive a timely end-use check could lead to the determination that it is at significant risk of involvement in activities contrary to U.S. national security or foreign policy interests, leading to concerns regarding its receipt of items subject to the EAR. To better reflect the nature of the risk presented by such entities, when the risk assessed is the result of the actions of the relevant host government authority rather than the actions of the entities themselves, BIS revised the heading of § 744.11, as well as the introductory text of § 744.11 and § 744.11(b), by adding language to also refer to entities that are “at significant risk” of acting contrary to the foreign policy and national security interests of the United States.
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Samsung Electronics Co. Granted One-Year Exemption From BIS’ Export Controls On Advanced Computing And Semiconductor Manufacturing Items to the People’s Republic of China (PRC)
October 14, 2022: As reported in the Wall Street Journal, Samsung Electronics Co. has been granted a one-year exemption from the new U.S. rules curbing China’s chip industry, joining a list of semiconductor companies that have received dispensation.
The U.S. Department of Commerce granted Samsung authorization to continue receiving chip-making equipment and other items needed to maintain its memory-chip production in China. The South Korean company operates chip facilities in two Chinese cities.
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Department of the Treasury
List Of Countries That May Require Participation In An International Boycott
October 3, 2022: 87 Fed. Reg. 59866: In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the U.S. Department of the Treasury has published the following list of countries that require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986):
- Iraq;
- Kuwait;
- Lebanon;
- Libya;
- Qatar;
- Saudi Arabia;
- Syria; and
- Yemen.
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Census Bureau
Cancellation of the Advanced Export Information (AEI) Pilot Program
October 14, 2022: The Census Bureau’s Economic Management Division (EMD) announces that the Census Bureau, in cooperation with the U.S. Customs and Border Protection (CBP), has decided to cancel the Advanced Export Information (AEI) Pilot Program. This decision to eliminate the AEI pilot program as an AES filing option was made because the Census Bureau was unable to conduct sufficient analysis and evaluation of the pilot program due to a lack of adequate participation.
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Disclosure Of Electronic Export Information (EEI) To Foreign Entities And Foreign Governments Is Not Permitted
October 27, 2022: Over the last several months, the U.S. Census Bureau (Census Bureau) has seen an increase in inquiries from foreign governments for copies of Electronic Export Information (EEI). The Census Bureau has also received inquiries from Industry about specific countries requiring EEI-related documentation, such as the Internal Transaction Number (ITN).
The information contained in the EEI is confidential, pursuant to U.S. law (13 U.S.C. §301(g)). The specific confidentiality provisions on the release of the EEI are contained in the Foreign Trade Regulations (FTR), Title 15, Code of Federal Regulations, Section 30.60. As stated in Section 30.60(c)(4) of the FTR, you may not provide the EEI to a foreign government for any purpose.
The EEI filing is required to satisfy U.S. regulatory requirements, not the needs of foreign governments. In place of providing the EEI to the foreign government, it is acceptable to provide the ITN since it is not considered a data element as defined in Section 30.6 of the FTR. However, if your shipment did not require EEI filing because the shipment was excluded or exempted from filing requirements, then the citation that was used in place of the ITN can be provided (i.e., post departure filing citation, AES downtime filing citation, and FTR exemption or exclusion). Additionally, documents that do not have confidentiality restrictions, such as an invoice or commercial loading document, can be provided to the foreign government for shipment verification to occur. Lastly, you can also provide the official response from the Census Bureau on letterhead indicating that EEI cannot be provided to foreign entities or governments under U.S. law, which is available below.
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Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
October 20, 2022: 87 Fed. Reg. 63800: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ), submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 1140-0005 (Application and Permit for Importation of Firearms, Ammunition, and Defense Articles (ATF6 permit)) is being revised due to minor material changes to the form, such as formatting and an additional sub question.
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October 20, 2022: 87 Fed. Reg. 63799: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ) submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection (IC) OMB 1140-0011 (Application to Make and Register a Firearm—ATF Form 1 (5320.1) is being revised to include changes due to formatting, additional definitions, updates to the instructions, and additional sub-questions required to comply with the Bipartisan Safer Communities Act.
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October 20, 2022: 87 Fed. Reg. 63801: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Department of Justice (DOJ), submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 1140-0055 (Identification of Explosive Materials) is being revised due to a reduction in the number of respondents, the total responses, and public burden hours associated with this IC, since the last renewal in 2019.
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U.S. Congress
The House Proposes Moving The Department of Commerce Responsibilities To The Department of Defense
October 28, 2022: U.S. Congressmen Jim Banks, Robert Wittman, and Greg Steube introduced HR. 9241 proposing “Prioritizing National Security in Export Controls Act of 2022” to the Committee on Foreign Affairs and to the Committees on Armed Services, and Appropriations, for consideration of such provisions as fall within the jurisdiction of the committees.
The proposed Bill seeks the transfer of export control authorities from the Department of Commerce to the Department of Defense. The proposed Bill states, “It is the sense of Congress that export control authority should be taken away from the Bureau of Industry and Security of the Department of Commerce since the Bureau has manifestly been unable to resolve the conflict of interest between promoting trade and protecting United States national security through enforcing restrictions on technology transfer to high-risk countries, especially China.” The proposed Bill also seeks to restrict individuals employed in a Senior Executive Service position related to export control in the Department of Commerce, including the Bureau of Industry and Security, from transferring from such position to a position in the Defense Technology and Security Administration of the Department of Defense.
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U.S. Defense Industry News
U.S. Next Generation Fighter To Be Developed Independently In U.S.
October 3, 2022: Unlike the F-35 program, which saw three US military branches and a handful of international partners involved in its creation, the US Air Force’s next-generation fighter will be developed independently, with many of its key attributes kept secret. However, Air Force officials have hinted there may be opportunities for the US and its allies to co-develop technologies that could be “associated” with future tactical aircraft — specifically the Collaborative Combat Aircraft (CCA) drones that will operate alongside the Next Generation Air Dominance (NGAD) manned fighter, as well as the mission systems inside the fighter itself.
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L3Harris Technologies Agreed To Buy Viasat’s Tactical Data Link Business
October 3, 2022: L3Harris Technologies agreed to buy Viasat’s tactical data link business for roughly $1.96 billion, a move officials with the defense and IT company say will extend its reach into the Pentagon’s ambitious communications overhaul known as Joint All-Domain Command and Control. The prospective acquisition consists of Link 16 Multifunctional Information Distribution System platforms, their associated terminals, which are installed in tens of thousands of U.S. and allied systems worldwide, and space assets.
| 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 State, Directorate of Defense Trade Controls (DDTC), Department of Commerce, Bureau of Industry and Security (BIS) and the Department of the Treasury, Office of Foreign Assets Control (OFAC)
October 14, 2022: The Department of State, Directorate of Defense Trade Controls (DDTC), Department of Commerce, Bureau of Industry and Security (BIS), and the Department of the Treasury, Office of Foreign Assets Control (OFAC) issued a joint statement on the impact of Sanctions and Export Controls on Russia and a summary of the actions they have taken. Since Russia’s unjustified and unprovoked invasion of Ukraine in February 2022, the United States has worked with allies and partners around the world to impose costs on Russia for its war of aggression. DDTC, BIS, and OFAC issued this joint alert to inform the public of the impact of sanctions and export control restrictions targeting Russia’s defense capabilities and warn of the risks of supporting Russia’s military-industrial complex.
See the following link for a copy of the statement:
https://home.treasury.gov/system/files/126/20221014_russia_alert.pdf
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Department of State, Bureau of International Security and Nonproliferation, State Department.
October 14, 2022: 87 Fed. Reg. 625484: The Department of State, Bureau of International Security and Nonproliferation, State Department has applied Section 3 of the Iran, North Korea, and Syria Nonproliferation Act against the following entities:
- Beijing J&A Industry & Trade Co. Ltd. (People's Republic of China (PRC); and any successor, sub-unit, or subsidiary thereof;
- Linda Zhai (PRC individual);
- Synnat Pharma Pvt Ltd (India) and any successor, sub-unit, or subsidiary thereof; and
- OTOBOT Project Group (Turkey) and any successor, sub-unit, or subsidiary thereof.
Accordingly, pursuant to Section 3 of the Act, the following measures are imposed on these persons:
- No department or agency of the U.S. government may procure or enter into any contract for the procurement of any goods, technology, or services from these foreign persons, except to the extent that the Secretary of State otherwise may determine;
- No department or agency of the U.S. government may provide any assistance to these foreign persons, and these persons shall not be eligible to participate in any assistance program of the U.S. government, except to the extent that the Secretary of State otherwise may determine;
- No U.S. government sales to these foreign persons of any item on the United States Munitions List are permitted, and all sales to these persons of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and
- No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Control Reform Act of 2018 or the Export Administration Regulations, and any existing such licenses are suspended.
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Department of Commerce, Bureau of Industry and Security (BIS)
October 4, 2022: 87 Fed. Reg. 60064: In response to the Russian Federation's (Russia's) further invasion of Ukraine on February 24, 2022, the illegal and unjustifiable basis of which has been furthered by its illegal purported annexation of regions of Ukraine, the Department of Commerce amended the Export Administration Regulations (EAR) by adding 57 entities under 57 entries to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. Of these 57 entities, 56 will be listed on the Entity List under the destination of Russia and one will be listed under the destination of the Crimea Region of Ukraine.
Crimea Region of Ukraine:
- Subsidiary Sevastopol Naval Plant of Zvezdochka Shipyard.
Russia:
- A. Lyulki Experimental-Design Bureau;
- A. Lyulki Science and Technology Center;
- AO Aviaagregat;
- Central Aerohydrodynamic Institute;
- Closed Joint Stock Company Turborus;
- Federal Autonomous Institution Central Institute of Engine-Building N.A. P.I. Baranov;
- Federal State Budgetary Institution of Science P.I. K.A. Valiev RAS of the Ministry of Science and Higher Education of Russia;
- Federal State Budgetary Institution National Research Center Institute n.a. NE Zhukovsky;
- Federal State Unitary Enterprise All-Russian Research Institute of Physical, Technical and Radio Engineering Measurements;
- Federal State Unitary Enterprise State Scientific-Research Institute for Aviation Systems;
- Federal Technical Regulation and Metrology Agency;
- Institute of Physics Named After P.N. Lebedev of the Russian Academy of Sciences;
- Institute of Solid-State Physics of the Russian Academy of Sciences;
- Joint Stock Company 121 Aviation Repair Plant;
- Joint Stock Company 123 Aviation Repair Plant;
- Joint Stock Company 218 Aviation Repair Plant;
- Joint Stock Company 360 Aviation Repair Plant;
- Joint Stock Company 514 Aviation Repair Plant;
- Joint Stock Company 766 UPTK;
- Joint Stock Company Aramil Aviation Repair Plant;
- Joint Stock Company Aviaremont;
- Joint Stock Company Flight Research Institute N.A. M.M. Gromov;
- Joint Stock Company Metallist Samara;
- Joint Stock Company Moscow Machinebuilding Enterprise named after V.V. Chernyshev;
- Joint Stock Company NII Steel;
- Joint Stock Company Remdizel;
- Joint Stock Company Special Industrial and Technical Base Zvezdochka;
- Joint Stock Company STAR;
- Joint Stock Company Votkinsk Machine Building Plant;
- Joint Stock Company Yaroslavl Radio Factory;
- Joint Stock Company Zlatoustovsky Machine Building Plant;
- Limited Liability Company Center for Specialized Production OSK Propulsion;
- Lytkarino Machine-Building Plant;
- Moscow Aviation Institute;
- Moscow Institute of Thermal Technology;
- National Research Center Kurchatov Institute;
- Omsk Motor-Manufacturing Design Bureau;
- Open Joint Stock Company 20 Aviation Repair Plant;
- Open Joint Stock Company 32 Repair Plant of Flight Support Equipment;
- Open Joint Stock Company 170 Flight Support Equipment Repair Plant;
- Open Joint Stock Company 275 Aviation Repair Plant;
- Open Joint Stock Company 308 Aviation Repair Plant;
- Open Joint Stock Company 322 Aviation Repair Plant;
- Open Joint Stock Company 325 Aviation Repair Plant;
- Open Joint Stock Company 680 Aircraft Repair Plant;
- Open Joint Stock Company 720 Special Flight Support Equipment Repair Plant;
- Open Joint Stock Company Volgograd Radio-Technical Equipment Plant;
- Public Joint Stock Company Agregat;
- Russian Institute of Radio Navigation and Time;
- Rzhanov Institute of Semiconductor Physics, Siberian Branch of Russian Academy of Sciences;
- Salute Gas Turbine Research and Production Center;
- Scientific-Production Association Vint of Zvezdochka Shipyard;
- Scientific Research Institute of Applied Acoustics;
- Siberian Scientific-Research Institute of Aviation N.A. S.A. Chaplygin;
- Software Research Institute, and
- Tula Arms Plant.
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October 20, 2022: 87 Fed. Reg. 63760: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued an Order renewing the Temporary Denial Order that it issued against Russian airline Avistar TU on April 21, 2022. The Office of Export Enforcement based its request for renewal upon the facts underlying the issuance of the initial TDO and the evidence developed over the course of this investigation, which indicate a blatant disregard for U.S. export controls, as well as the TDO. Specifically, the initial TDO, issued on April 21, 2022, was based on evidence that Aviastar engaged in conduct prohibited by the Regulations by operating multiple aircraft subject to the EAR and classified under ECCN 9A991.b on flights into Russia after March 2, 2022, from destinations including Hangzhou, China, Shenzhen, China, and Zhengzhou, China, without the required BIS authorization.
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Department of the Treasury, Office of Foreign Assets Control (OFAC)
October 3, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and one business entity in Bosnia and Herzegovina (BiH) pursuant to Executive Order (E.O.) 14033. These designations follow OFAC’s September 26, 2022, designation of a corrupt state prosecutor in BiH and build on other recent sanctions imposed on individuals and entities in the region. Collectively, these actions underscore the United States’ willingness to hold accountable those enabling divisive and destabilizing activities in the Western Balkans.
The following individuals have been added to OFAC's SDN List:
- Novalic, Fadil of Bosnia and Herzegovina; and
- Stankovic, Slobodan of Bosnia and Herzegovina.
The following entity has been added to OFAC's SDN List:
- Integral Inzenjering A.D. Laktasi of Bosnia and Herzegovina.
https://home.treasury.gov/news/press-releases/jy0985 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221003
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October 6, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven senior leaders within Iran’s government and security apparatus for the shutdown of Iran’s Internet access and the continued violence against peaceful protesters in the wake of the tragic death of 22-year-old Mahsa Amini, who was arrested for allegedly wearing a hijab improperly, and died in the custody of Iran’s Morality Police. This action follows OFAC’s September 22 designation of Iran’s Morality Police, its senior leadership, and other senior leaders of Iran’s security organizations. Together with the release of Iran General License D-2, which authorizes exports of additional tools to assist Iranians in accessing the Internet, these designations demonstrate the United States’ commitment to free, peaceful assembly and open communication. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also designated three individuals and one entity connected to Burma’s military regime pursuant to Executive Order (E.O.) 14014. Following the February 1, 2021, coup that overthrew Burma’s democratically elected civilian government, the military has committed numerous atrocities against people in Burma, including the violent repression of political dissent, the killing of over 2,300 innocent civilians, and displacement of more than 900,000 people.
The following individuals have been added to OFAC's SDN List:
- Javani, Yadollah of Iran;
- Majid, Vahid Mohammad Naser of Iran;
- Nejat, Hossein of Iran;
- Rahimi, Hossein of Iran;
- Sajedinia, Hossein of Iran;
- Zarepour, Eisa of Iran;
- Myint, Aung Moe of Burma;
- Myint, Hlaing Moe of Burma; and
- Thitsar, Myo of Burma.
The following entity has been added to OFAC's SDN List:
- Dynasty International Company Limited of Burma.
https://home.treasury.gov/news/press-releases/jy0994 and https://home.treasury.gov/news/press-releases/jy0996 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221006
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October 7, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two individuals and three entities for activities related to the exportation of petroleum to the Democratic People’s Republic of Korea (DPRK), which directly supports the development of DPRK weapons programs and its military. This action highlights the U.S. Government’s commitment to implement existing United Nations Security Council resolutions (UNSCRs), including holding the DPRK accountable for its use of illicit ship-to-ship (STS) transfers to circumvent UN sanctions that restrict the import of petroleum products and supports the development of its weapons programs and military.
OFAC also designated Malaysian national Teo Boon Ching, the Teo Boon Ching Wildlife Trafficking Transnational Criminal Organization (TCO), and the Malaysian company Sunrise Greenland Sdn. Bhd. for the cruel trafficking of endangered and threatened wildlife and the products of brutal poaching. Teo Boon Ching specializes in the transportation of rhino horn, ivory, and pangolins from Africa, generally utilizing routes through Malaysia and Laos and onward to consumers in Vietnam and China.
The following individuals have been added to OFAC's SDN List:
- Chen, Shih Huan of Taiwan;
- Ching, Teo Boon of Malaysia; and
- Kwek, Kee Seng of Singapore.
The following entities have been added to OFAC's SDN List:
- Anfasar Trading S PTE. LTD. of Singapore;
- New Eastern Shipping Co LTD of Singapore and China;
- Sunrise Greenland SDN. BHD of Malaysia;
- Swanseas Port Services PTE. LTD. of Signapore; and
- Teo Boon Ching Wildlife Trafficking Transnational Criminal Organization of Malaysia, Thailand, Laos, Vietnam, China and Hong Kong.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221007 and https://home.treasury.gov/news/press-releases/jy1000 and https://home.treasury.gov/news/press-releases/jy1001
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October 14, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published the following new Russia Frequently Asked Questions:
Question 1092: Do non-U.S. companies risk exposure to sanctions for providing ammunition or other military goods to Russia or for supporting Russia’s military-industrial complex?
Answer: Yes. Multiple Russia-related sanctions authorities authorize sanctions against non-U.S. persons that provide goods, services, or other support for Russia’s military-industrial complex. For example, OFAC may block any person determined to operate or have operated in the defense and related materiel sector of the Russian Federation economy pursuant to Executive Order (E.O.) 14024 of April 15, 2021, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation.” In addition, pursuant to E.O. 14024, OFAC may block persons determined to have materially assisted, sponsored, or provided financial, material, or technological support for or goods or services to or in support of certain sanctionable activities enumerated in E.O. 14024 or any person whose property and interests in property are blocked pursuant to E.O. 14024. OFAC also has robust targeting authorities pursuant to the Ukraine-/Russia-Related Sanctions Regulations (URSR), 31 C.F.R. part 589, which implement multiple authorities that could provide for the blocking of persons who engage in the provision of ammunition or other military goods to the Russian Federation, including persons determined to operate or have operated in the arms or related materiel sector of the Russian Federation economy, or those who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of persons blocked pursuant to the URSR.
OFAC is prepared to use its broad targeting authorities against non-U.S. persons that provide ammunition or other support to the Russian Federation’s military-industrial complex, as well as private military companies (PMCs) or paramilitary groups participating in or otherwise supporting the Russian Federation’s unlawful and unjustified attack on Ukraine. OFAC will continue to target Russia’s efforts to resupply its weapons and sustain its war of aggression against Ukraine, including any foreign persons who assist the Russian Federation in those efforts.
OFAC and the Department of State have imposed numerous targeted sanctions on the Russian Federation’s military-industrial complex, including on State Corporation Rostec, the cornerstone of Russia’s defense-industrial base, and multiple other key firms. In addition, the Department of State has identified persons that are part of, or operate for or on behalf of, the defense and intelligence sectors of the Government of the Russian Federation pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) (CAATSA 231 List of Specified Persons). Persons determined to knowingly engage in a significant transaction with those identified on the CAATSA 231 List of Specified Persons are subject to five or more sanctions described in Section 235 of CAATSA. The Department of Commerce’s Bureau of Industry and Security (BIS) has also imposed highly restrictive controls on the export and reexport of U.S.-origin and certain foreign-produced commodities, software, and technologies to the Russian Federation to cut off its access to inputs and products needed to sustain its military capabilities.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1092
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October 13, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) published one sectoral determination issued pursuant to an April 15, 2021, Executive order, as well as a category of services determination issued pursuant to an April 6, 2022, Executive order. Each determination was previously issued on OFAC's website. On April 15, 2021, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), issued Executive Order (E.O.) 14024 (86 FR 20249, April 19, 2022). Among other prohibitions, section 1(a) of E.O. 14024 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any U.S. person of, any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) to operate or have operated in the technology sector or the defense and related materiel sector of the Russian Federation economy, or any other sector of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State. On April 6, 2022, the President, invoking the authority of, inter alia, IEEPA, issued 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” (87 FR 20999, April 8, 2022). Among other prohibitions, section 1(a)(ii) of E.O. 14071 prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation. On September 15, 2022, pursuant to delegated authority, the Director of OFAC, in consultation with the Department of State, issued a sectoral determination pursuant to E.O. 14024. This determination took effect upon publication on OFAC's website, which occurred on September 15, 2022. Also, on September 15, 2022, pursuant to delegated authority, the Director of OFAC, in consultation with the Department of State, issued a category of services determination pursuant to E.O. 14071.
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October 13, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) published the following General licenses:
General License D-2 (87 Fed. Reg. 62003):
General License With Respect to Certain Services, Software, and Hardware Incident to Communications
(a) To the extent that such transactions are not exempt from the prohibitions of the Iranian Transactions and Sanctions Regulations, 31 CFR part 560 (ITSR), and subject to the restrictions set forth in paragraph (b), the following transactions are authorized:
(1) Fee-based or no-cost services. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran of fee-based or no-cost services incident to the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction, authorized or exempt under the ITSR.
(2) Fee-based or no-cost software. (i) Software subject to the EAR. The exportation, reexportation, or provision, directly or indirectly, to Iran of fee-based or no-cost software subject to the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR), that is incident to, or enables services incident to, the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR, provided that such software is designated EAR99 or classified by the U.S. Department of Commerce on the Commerce Control List, 15 CFR part 774, supplement No. 1 (CCL), under export control classification number (ECCN) 5D992.c.
(ii) Software that is not subject to the EAR because it is of foreign origin and is located outside the United States. The exportation, reexportation, or provision, directly or indirectly, by a U.S. person, wherever located, to Iran of fee-based or no-cost software that is not subject to the EAR because it is of foreign origin and is located outside the United States, that is incident to, or enables services incident to, the exchange of communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services, as well as cloud-based services in support of the foregoing or of any other transaction authorized or exempt under the ITSR, provided that such software would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5D992.c if it were subject to the EAR.
General License 13B (87 Fed. Reg. 62005):
Authorizing Certain Administrative Transactions Prohibited by Directive 4 Under Executive Order 14024
(a) Except as provided in paragraph (b) of this general license, 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 (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, 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, December 7, 2022.
(b) 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.
(c) Effective September 8, 2022, General License No. 13A, dated May 25, 2022, is replaced and superseded in its entirety by this General License No. 13B.
General License 3 (87 Fed. Reg. 62005):
Authorizing Transactions Related to, Provision of Financing for, and Other Dealings in Certain Bonds.
(a) Except as provided in paragraph (c) of this general license, all transactions related to, the provision of financing for, and other dealings in bonds specified in the Annex to this general license that would be prohibited by Subsection l(a)(iii) of Executive Order of August 24, 2017, “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” are authorized.
(b) Except as provided in paragraph (c) of this general license, all transactions related to, the provision of financing for, and other dealings in bonds that were issued both (i) prior to the effective date of Executive Order of August 24, 2017, and (ii) by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela, are authorized.
(c) This general license does not authorize any transaction that is otherwise prohibited by Executive Order of August 24, 2017, Executive Order 13692 of March 8, 2015, or any part of 31 CFR chapter V.
General License 9 (87 Fed. Reg. 62020):
Authorizing Transactions Related to Dealings in Certain Debt.
(a) Except as provided in paragraph (d) of this general license, all transactions and activities prohibited by Section 1(a)(iii) of Executive Order 13808 (E.O. 13808) or Executive Order 13850 that are ordinarily incident and necessary to dealings in any debt (including the bonds listed on the Annex to this general license, promissory notes, and other receivables) of Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (together, PdVSA-related debt), issued prior to August 25, 2017 (the effective date of E.O. 13808), are authorized, provided that any divestment or transfer of, or facilitation of divestment or transfer of, any holdings in such debt must be to a non-U.S. person.
(b) The transactions and activities authorized in paragraph (a) include facilitating, clearing, and settling transactions to divest to a non-U.S. person PdVSA-related debt, including on behalf of U.S. persons.
(c) Except as provided in paragraph (d) of this general license, all transactions and activities prohibited by Section 1(a)(iii) of E.O. 13808 that are ordinarily incident and necessary to dealings in any bonds that were issued prior to August 25, 2017 (the effective date of E.O. 13808) by the following entities or any of their subsidiaries, are authorized:
- PDV Holdings, Inc.
- CITGO Holdings, Inc.
- Nynas AB
(d) This general license does not authorize:
(1) The unblocking of any property blocked pursuant to any part of 31 CFR chapter V, except as authorized by paragraph (a);
(2) U.S. persons to sell PdVSA-related debt to, to purchase or invest in the debt of, or to facilitate such transactions with, directly or indirectly, any person whose property and interests in property are blocked pursuant to E.O. 13850, including PdVSA and any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, other than purchases of or investments in PdVSA-related debt (including settlement of purchases or sales that were pending on January 28, 2019) that are ordinarily incident and necessary to the divestment or transfer of PdVSA-related debt;
(3) Any transaction that is otherwise prohibited under Executive Order 13850 of November 1, 2018, Executive Order 13835 of May 21, 2018, Executive Order 13827 of March 19, 2018, Executive Order 13808 of August 24, 2017, Executive Order 13692 of March 8, 2015, or any part of 31 CFR chapter V, or any transactions or dealings with any blocked person other than the transactions described in paragraph (a) of this general license.
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October 17, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 28A.
General License 28A: Authorizing Certain Transactions Involving Public Joint Stock Company Transkapitalbank and Afghanistan. All transactions involving Public Joint Stock Company Transkapitalbank (TKB), or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that are ultimately destined for or originating from Afghanistan and prohibited by Executive Order (E.O.) 14024 are authorized through 12:01 a.m. eastern standard time, January 18, 2023.
U.S. financial institutions are authorized to operate correspondent accounts on behalf of TKB, or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, provided such accounts are used solely to effect transactions authorized above.
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 involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
https://home.treasury.gov/system/files/126/russia_gl28a.pdf
In addition, OFAC has updated the following lists:
The following individuals have been added to OFAC's Specially Designated Nationals List:
- Adale, Khalif of Somlia and Djibouti;
- Aden, Mohamoud Abdi of Somalia and Kenya;
- Afgooye, Hassan of Somalia;
- Ato, Mustaf of Somalia;
- Badaas, Mohamed Ali of Yemen;
- Gagaale, Abdikarim Hussein of Somalia;
- Jeeri, Abdullahi of Somalia;
- Jiis, Yasir of Somalia;
- Mataan, Ahmed Hasan Ali Sulaiman of Yemen;
- Mire, Mohamed, Jilib of Somalia;
- Nurey, Abdirahman of Somalia;
- Nurow, Yusuf Ahmed Hajji of Somalia;
- Salad, Mohamed Hussein, Al Mukalla of Yemen; and
- Samad, Abdi of Somalia.
The following deletions have been made to OFAC’s SDN List:
- Micallef, Terence of Malta.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221017
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October 19, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Juan Francisco Valenzuela Valenzuela and the Valenzuela Drug Trafficking Organization (“Valenzuela DTO”), among others, pursuant to Executive Order (E.O.) 14059. Originally established as a transportation cell, the Valenzuela DTO evolved into a sophisticated network that became invaluable to Sinaloa Cartel leadership. Named after the family who facilitated its rise to prominence, the Valenzuela DTO was run by siblings Jorge Alberto, Wuendi Yuridia, and Juan Francisco Valenzuela Valenzuela in recent years. Following the arrests of Jorge Alberto and Wuendi Yuridia by U.S. authorities in October 2020 and November 2021, respectively, Juan Francisco Valenzuela Valenzuela is the last remaining sibling involved in the Valenzuela DTO’s operations in Mexico. Operating under the umbrella of the Sinaloa Cartel, the Valenzuela DTO is involved in the importation and transport of multi-ton quantities of illicit drugs, including methamphetamine, heroin, and fentanyl, from Mexico to the United States.
The following Individuals have been added to OFAC's SDN List:
- Araujo Peralta of Mexico;
- Rivas Chaires of Mexico; and
- Valenzuela Valenzuela of Mexico.
The following entities have been added to OFAC's SDN List:
- ARFEL Transportadora Cool Logistic, S.A. DE C.V. of Mexico;
- Servicios De Transporte Maruha, Sociedad Anonima De Capital Variable of Mexico;
- Transportes Refrigerados Pandas Trucking, Sociedad Anonima De Capital Variable of Mexico; and
- Valenzuela Drug Trafficking Organization of Mexico.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221019 and https://home.treasury.gov/news/press-releases/jy1034
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October 19, 2022: In coordination with the U.S. Department of Justice and the Federal Bureau of Investigation (FBI), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Russian network that procured military and sensitive dual-use technologies from U.S. manufacturers and supplied them to Russian end-users.
Those designated are Russian national and procurement agent Yury Yuryevich Orekhov (Orekhov) and two of his companies, Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH) and Opus Energy Trading LLC (Opus Energy Trading). These designations highlight the U.S. government’s continuing efforts to hinder Russia’s ability to wage its war of aggression in Ukraine, including by holding accountable those who support Russia’s military by disrupting its illicit defense and technology procurement networks around the world.
The following individual has been added to OFAC's SDN List:
OREKHOV, Yury Yuryevichof the United Arab Emirates, Kazakhstan, and Russia.
The following entities have been added to OFAC's SDN List:
- Nda Nord-Deutsche Industrieanlagenbau GMBH of Germany; and
- Opus Energy Trading LLC of the United Arab Emirates.
https://home.treasury.gov/news/press-releases/jy1035 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221019_33
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October 24, 2022: The U.S. Department of the Treasury (Treasury) Office of Foreign Assets Control (OFAC) designated the Nicaraguan mining authority General Directorate of Mines (DGM) as well as one official of the Government of Nicaragua, pursuant to Executive Order (E.O.) 13851.
Additionally, President Biden signed a new E.O. that amends E.O. 13851 and expands the Treasury’s authority to hold the Ortega-Murillo regime accountable for its continued attacks on Nicaraguans’ freedom of expression and assembly. Furthermore, the new E.O. gives Treasury the authority to target certain persons that operate or have operated in the gold sector of the Nicaraguan economy, and any other sector identified by the Secretary of the Treasury in consultation with the Secretary of State. The new E.O. also provides expanded sanctions authorities that could be used to prohibit new U.S. investment in certain identified sectors in Nicaragua, the importation of certain products of Nicaraguan origin into the United States, or the exportation from the United States, or by a United States person, wherever located, of certain items to Nicaragua.
The following names have been added to OFAC's list of Specially Designated Nationals:
- Cerna Juarez, Reinaldo Gregorio Lenin of Nicaragua.
The following entity has been added to OFAC's SDN List:
- General Directorate Of Mines of Nicaragua.
Nicaragua General License 4: All transactions ordinarily incident and necessary to the wind-down of any transaction involving the Directorate General of Mines (DGM) of the Nicaraguan Ministry of Energy and Mines, or any entity in which DGM owns, directly or indirectly, a 50 percent or greater interest that are prohibited by the Nicaragua Sanctions Regulations, 31 CFR part 582 (NSR), are authorized through 12:01 a.m. eastern standard time, November 23, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the NSR. This general license does not authorize any transactions otherwise prohibited by the NSR, including transactions involving any person blocked pursuant to the NSR, other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
https://home.treasury.gov/news/press-releases/jy1046 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221024 and https://home.treasury.gov/system/files/126/14088.pdf and https://home.treasury.gov/system/files/126/nicaragua_gl4.pdf and
OFAC issued the following Nicaragua Sanctions related to Frequently Asked Questions:
Question 1093: What does Nicaragua General License (GL) 4 authorize?
Answer: Nicaragua GL 4 authorizes U.S. persons to engage in transactions prohibited by the Nicaragua Sanctions Regulations, 31 CFR part 582 (the NSR), that are ordinarily incident and necessary to the wind-down of any transaction involving the Directorate General of Mines (DGM) of the Nicaraguan Ministry of Energy and Mines, or any entity in which DGM owns, directly or indirectly, a 50 percent or greater interest (collectively, “Blocked DGM Entities”), through 12:01 a.m. eastern standard time, November 23, 2022, provided that any payment to a blocked person must be made into a blocked account in accordance with the NSR.
After the expiration of this authorization, unless exempt or authorized by the Office of Foreign Assets Control, U.S. persons will be prohibited from engaging in transactions with the Blocked DGM Entities and must block property or interests in property of any Blocked DGM Entities that are in, or thereafter come within, the United States, or the possession or control of a U.S. person.
Non-U.S. persons generally do not risk exposure to U.S. blocking sanctions under the NSR 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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October 26, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 Iranian officials for the brutal ongoing crackdown on nationwide protests in Iran, as well as two Iranian intelligence actors and two Iranian entities involved in the Iranian government’s efforts to disrupt digital freedom. This action comes 40 days after 22-year-old Mahsa Amini’s arrest and death in the custody of Iran’s Morality Police and the ongoing brutal crackdown on peaceful protests in Iran and follows OFAC designations on September 22 and October 6, 2022, which targeted key Iranian organizations and officials involved in the Iranian regime’s ongoing repression and its denial of the fundamental freedoms and universal rights of its citizens. These sanctions, coupled with additional initiatives such as the release of Iran General License D-2, which expands and clarifies the range of U.S. software and internet services available to Iranians under OFAC’s sanctions program, demonstrate the United States’ commitment to supporting the Iranian people’s call for accountability and justice, as well as their right to freely exchange information, including online.
OFAC also took action to counter the Government of the Russian Federation’s (GoR) persistent malign influence campaigns and systemic corruption in Moldova by imposing sanctions on nine individuals and 12 entities. The individuals and entities sanctioned include oligarchs widely recognized for capturing and corrupting Moldova’s political and economic institutions and those acting as instruments of Russia’s global influence campaign, which seeks to manipulate the United States and its allies and partners, including Moldova and Ukraine. The designations include former Moldovan government official Vladimir Plahotniuc, who engaged in state capture by exerting control over and manipulating key sectors of Moldova’s government, including the law enforcement, electoral, and judicial sectors.
The following individuals have been added to OFAC's SDN List:
- Al-Ghaib, Seyyed Heshmatollah Hayat of Iran;
- Chayka, Igor Yuryevich of Russia;
- Farzadi, Hedayat of Iran;
- Fathi, Murad of Iran;
- Gonin, Leonid Mikhailovich of Russia;
- Grak, Olga Yurievna of Russia;
- Gudilin, Yuriy Igorevich of Russia;
- Karimi, Farzin of Iran;
- Kazemi, Mohammad of Iran;
- Khiabani, Hossein Modarres of Iran;
- Khosravi, Mohammad Hossein of Iran;
- Mirheydary, Mohammad Reza of Iran;
- Mostafavi, Seyed Mojtaba of Iran;
- Nilforushan, Abbas of Iran;
- Ostad, Mohammad Reza of Iran;
- Pasandideh, Heidar of Iran;
- Piri, Morteza of Iran;
- Plahotniuc, Vladimir of Cyprus, Romania and Maldova;
- Shafahi, Ahmad of Iran;
- Shor, Ilan Mironovich of Israel and Moldova;
- Shor, Sara Lvovna or Russia;
- Troshin, Aleksei Valeryevich or Russia;
- Zavorotnyi, Ivan Aleksandrovich of Russia.
The following entities have been added to OFAC's SDN List:
- Aktsionernoe Obshchestvo Natsionalnaya Inzhiniringovaya Korporatsiya of Russia;
- Bushehr Prison of Iran;
- OOO Agro-Region of Russia;
- OOO Aqua Solid of Russia;
- OOO BM Proekt-Ekologiya of Russia;
- OOO Ekogrupp of Russia;
- OOO Innovatsii Sveta of Russia;
- OOO Inzhiniring.RF of Russia;
- OOO Khartiya of Russia;
- OOO Kompaniya Zolotoi Vek of Russia;
- OOO Mezhmunitsipalnoe ATP of Russia;
- OOO Region-Comfort of Russia;
- Ravin Academy of Iran;
- Samane Gostar Sahab Pardaz Private Limited Company of Iran; and
- Shor Party of Russia.
https://home.treasury.gov/news/press-releases/jy1048 and https://home.treasury.gov/news/press-releases/jy1049 and https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221026
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October 28, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against the 15 Khordad Foundation, an Iran-based foundation that has issued a multi-million-dollar bounty for the killing of prominent Indian-born, British-American author Salman Rushdie. Since Ayatollah Ruhollah Khomeini’s order pronouncing a death sentence on Rushdie in February 1989, 15 Khordad Foundation has committed millions of dollars to anyone willing to carry out this heinous act. Since putting its bounty on Rushdie, the 15 Khordad Foundation, which is affiliated with the Supreme Leader, has raised the reward for targeting the author.
The following entity has been added to OFAC's SDN List:
- 15 Khordad Foundation of Iran.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221028
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October 31, 2022: The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing a Russia-related Frequently Asked Question (1094).
Question 1094: Is crude oil of Russian Federation origin that is loaded onto a vessel at the port of loading for maritime transport prior to December 5, 2022, subject to the price cap?
Answer: No, provided the oil is unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023. Crude oil of Russian Federation origin that is loaded onto a vessel at the port of loading prior to 12:01 a.m., eastern standard time, December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023, is not subject to the price cap (also known as the “maritime services policy”). U.S. service providers can continue to provide services related to the maritime transport of crude oil of Russian Federation origin purchased at a price above the price cap, provided that the crude oil is loaded onto a vessel at the port of loading for maritime transport prior to 12:01 a.m., eastern standard time, December 5, 2022, and unloaded at the port of destination prior to 12:01 a.m., eastern standard time, January 19, 2023.
The following is an example of a permissible transaction in line with the maritime service's policy:
- A U.S. commodities trader signs a contract on November 1, 2022, to purchase crude oil of Russian Federation origin for shipment to a jurisdiction that has not prohibited the import of such crude oil. The U.S. commodities trader arranges for the oil to be loaded onto a vessel at the port of loading. The vessel is loaded on December 1, 2022, and a bill of lading is issued. The oil is shipped and discharged at the port of destination on December 15, 2022. U.S. insurance companies provide cover for this shipment/voyage and pay out any related claims, as appropriate.
As noted in OFAC’s preliminary guidance, OFAC anticipates implementing the maritime service's policy by publishing a determination pursuant to Executive Order 14071 that (i) permits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of services related to the maritime transport of crude oil or petroleum products of Russian Federation origin, where the price of such crude oil or petroleum products of Russian Federation origin does not exceed the price cap and (ii) prohibits such services if the crude oil or petroleum products of Russian Federation origin are purchased above the price cap. This determination would take effect at 12:01 a.m., eastern standard time, December 5, 2022, with respect to maritime transport of crude oil of Russian Federation origin loaded on or after 12:01 a.m., eastern standard time, December 5, 2022.
https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1094
Fines and Penalties
October 11, 2022: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) settled with Bittrex, Inc., a private company based in Bellevue, Washington, that provides online virtual currency exchange and hosted wallet services. Bittrex agreed to remit $24,280,829.20 to settle its potential civil liability for apparent violations of sanctions against Cuba, Ukraine-related, Iran, Sudan, and Syria. As a result of deficiencies related to Bittrex's sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the sanctioned jurisdictions from using its platform to engage in over $263,000,000 worth of virtual currency-related transactions. Based on internet protocol ("IP") address information and physical address information collected about each customer at onboarding, Bittrex had reason to know that these users were located in jurisdictions subject to sanctions. At the time of the transactions, however, Bittrex was not screening this customer information for terms associated with sanctioned jurisdictions.
The statutory maximum civil monetary penalty applicable in this matter is $35,773,364,108.57. OFAC determined that the Apparent Violations were not voluntarily self-disclosed and were non-egregious. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter equals the applicable schedule amount, which is $485,616,584.00. The settlement amount of $24,280,829.20 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221011 and https://home.treasury.gov/system/files/126/20221011_bittrex.pdf
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October 11, 2022: A U.K. national, Graham Bonham-Carter, 62, was arrested for conspiracy to violate U.S. sanctions imposed on Russian Oligarch Oleg Vladimirovich Deripaska and wire fraud in connection with funding U.S. properties purchased by Deripaska and efforts to expatriate Deripaska’s artwork in the United States through misrepresentations. The U.S. government will seek his extradition to the United States. Deripaska was previously charged with U.S. sanctions violations in an indictment unsealed on Sept. 29.
On April 6, 2018, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) designated Deripaska as a Specially Designated National (SDN), in connection with its finding that the actions of the Government of the Russian Federation with respect to Ukraine constitute an unusual and extraordinary threat to U.S. national security and foreign policy (the OFAC Sanctions). According to the U.S. Treasury, Deripaska was sanctioned for having acted or purported to act on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation and for operating in the energy sector of the Russian Federation economy.
According to court documents, Graham Bonham-Carter, 62, of the United Kingdom, worked for entities controlled by Deripaska from July 2003 through the present. Among other things, Bonham-Carter managed Deripaska’s residential properties located in the United Kingdom and Europe, including a house in Belgravia Square, London. Even after OFAC designated Deripaska, Bonham-Carter continued to work for Deripaska and referred to Deripaska as his “boss.” For example, in an email dated on or about June 18, 2018, Bonham-Carter wrote: “Times a bit tough for my boss as sanctions have hit him from the USA, so not an ideal time.” In an email dated on or about Oct. 13, 2021, Bonham-Carter wrote: “It[’]s all good apart from banks keep shutting me down because of my affiliation to my boss Oleg Deripaska.... I have even been advised not to go to the USA where Oleg still has personal sanctions as the authorities will undoubtedly pull me to one side, and the questioning could be hours or even days!!”
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October 13, 2022: The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has issued an Order temporarily denying the export privileges of URAL Airlines JSC headquartered in Yekaterinburg, Russia. The Order is based on facts indicating that URAL engaged in conduct prohibited by the Export Administration Regulations (EAR) by operating multiple aircraft subject to the EAR and classified under ECCN 9A991 on international flights, including from Bishkek, Kyrgyzstan; Dushanbe, Tajikistan; Khudzhand, Tajikistan and Tamchy, Kyrgyzstan to Russia after March 2, 2022, without the required BIS authorization.
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October 17, 2022: Intertech Trading Corporation, an Atkinson, New Hampshire-based laboratory equipment distributor, was sentenced in federal court after pleading guilty to 14 felony counts of failure to file export information on shipments to Russia and Ukraine, United States Attorney Jane E. Young announced. Judge Paul Barbadoro ordered that Intertech pay the maximum allowable fine of $10,000 per count, for a total of $140,000, and be subject to a two-year term of corporate probation and monitoring.
According to court documents and statements made in court, between 2015 and 2019, Intertech exported laboratory equipment to Russia, Ukraine, and elsewhere, falsely describing the nature and value of the exported items on commercial invoices and shipping forms. In its plea agreement, Intertech admitted that it used false, innocuous descriptions such as “lamp for aquarium” or “spares for welding system,” rather than accurately identifying the sophisticated scientific equipment actually contained in the shipments. Intertech admitted that it drastically undervalued the shipments, thereby evading the requirement to file Electronic Export Information, which would have been reported to the Departments of Commerce and Homeland Security.
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October 18, 2022: A global building materials manufacturer and its subsidiary, Lafarge S.A., headquartered in Paris, France, and Lafarge Cement Syria (LCS) S.A., headquartered in Damascus, Syria, pleaded guilty to a one-count criminal information charging them with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations. Immediately following the defendants’ guilty pleas this morning, the defendants were sentenced to terms of probation and to pay financial penalties, including criminal fines and forfeiture, totaling $77.78 million. According to court documents, Lafarge S.A. and Lafarge Cement Syria (LCS) S.A., schemed to pay ISIS and ANF in exchange for permission to operate a cement plant in Syria from 2013 to 2014, which enabled LCS to obtain approximately $70.3 million in revenue.
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October 18, 2022: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued a Finding of Violation (FoV) to Nodus International Bank, Inc. (Nodus), an international financial entity located in Puerto Rico, for violations of the Venezuelan Sanctions Regulations (VSR) and the Reporting, Penalties, and Procedures Regulations (RPPR). The VSR violations related to Nodus’s voluntary self-disclosure of three unlicensed transactions in which an individual (the “blocked person”) on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”) had an interest. The RPPR violations reflected Nodus’s failure to maintain full and accurate records related to the handling of blocked property and its inaccurate reporting of the blocked property to OFAC. OFAC determined that the appropriate administrative action in this matter was an FoV in lieu of a civil monetary penalty. This action emphasizes that financial institutions should properly maintain blocked property and records, report such information accurately to OFAC, and obtain a specific license from OFAC in order to deal in blocked property.
https://home.treasury.gov/system/files/126/20221018_nodus.pdf and
https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20221018
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October 19, 2022: In separate charges unsealed by the U.S. Attorney's Offices for the Eastern District of New York and the District of Connecticut, and with the support of the Department’s Task Force KleptoCapture, the Justice Department has charged nearly a dozen individuals and several corporate entities with participating in unlawful schemes to export powerful, civil-military, dual-use technologies to Russia some of which have been recovered on battlefields in Ukraine while another nuclear proliferation technology was intercepted before reaching Russian soil.
In the Eastern District of New York, five Russian nationals (Yury Orekhov, Artem Uss, Svetlana Kuzurgasheva, also known as “Lana Neumann,” Timofey Telegin, and Sergey Tulyakov) and two oil brokers (Juan Fernando Serrano Ponce, also known as “Juanfe Serrano” and Juan Carlos Soto) for Venezuela are charged in an indictment for their alleged participation in a global sanctions evasion and money laundering scheme. One defendant was arrested on Oct. 17 in Germany, and another defendant was arrested on Oct. 17 in Italy, both at the request of the United States. As alleged, the defendants obtained military technology from U.S. companies, smuggled millions of barrels of oil, and laundered tens of millions of dollars for Russian industrialists, sanctioned entities, and the world’s largest energy conglomerate.
Separately, in the U.S. District Court for the District of Connecticut, a superseding indictment was unsealed charging four individuals, three of whom were arrested by Latvian authorities on Oct. 18 and one by Estonian authorities on June 13 at the request of the United States and two companies in Europe with violating U.S. export laws by attempting to smuggle a dual-use, export-controlled item – a high-precision computer-controlled grinding machine – to Russia. Commonly known as a “jig grinder,” the item is export-controlled for its use in nuclear proliferation and defense programs.
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In three separate cases in the U.S. Attorney's Offices for the Eastern District of New York and the District of New Jersey, the U.S. Department of Justice (DOJ) has charged 13 individuals, including members of the People’s Republic of China (PRC) security and intelligence apparatus and their agents, for alleged efforts to unlawfully exert influence in the United States for the benefit of the government of the PRC.
A criminal complaint has been unsealed in federal court in Brooklyn, charging two People’s Republic of China (PRC) intelligence officers with attempting to obstruct a criminal prosecution in the Eastern District of New York. The defendants remain at large. According to court documents, Dong He, aka Guochun He and aka Jacky He, and Zheng Wang, aka Zen Wang, allegedly orchestrated a scheme to steal files and other information from the U.S. Attorney’s Office for the Eastern District of New York related to the ongoing federal criminal investigation and prosecution of a global telecommunications company (Company-1) based in the PRC, including by paying a $41,000 Bitcoin bribe to a U.S. government employee who the defendants believed had been recruited to work for the PRC, but who in fact was a double agent working on behalf of the FBI.
https://www.justice.gov/opa/press-release/file/1546421/download
A federal indictment has been unsealed charging four Chinese nationals, including three Ministry of State Security (MSS) intelligence officers, in connection with a long-running intelligence campaign targeting individuals in the United States to act as agents of the PRC. As alleged in the indictment, from at least 2008 to 2018, Wang Lin, 59; Bi Hongwei, age unknown; Dong Ting, aka Chelsea Dong, 40; Wang Qiang, 55, and others engaged in a wide-ranging and systematic effort to target and recruit individuals to act on behalf of the PRC in the United States with requests to provide information, materials, equipment, and assistance to the Chinese government in ways that would further China’s intelligence objectives. These recruitment efforts included targeting professors at universities, former federal law enforcement, and state homeland security official, and others to act on behalf of, and as agents of, the Chinese government. As part of the conspiracy, MSS intelligence officers Wang Lin, Dong Ting, and others used a purported academic institute at the Ocean University of China – referred to as the Institute for International Studies (IIS) – as cover for their clandestine intelligence activities. Acting undercover as the purported director of the IIS, Wang Lin, in coordination with other MSS operatives operating under the guise of academics at the IIS, targeted professors at American universities and others in the United States with access to sensitive information and equipment. According to the indictment unsealed, MSS intelligence officers Wang Lin, Bi, Dong, and others, acting for and on behalf of the MSS and the Chinese government, systematically targeted United States persons, including but not limited to a coconspirator who was a resident of the state of New Jersey and a second individual who was a former federal law enforcement officer and state homeland security official and a professor at an American university.
https://www.justice.gov/opa/press-release/file/1546466/download and https://www.justice.gov/usao-nj/pr/chinese-intelligence-officers-charged-using-academic-cover-target-individuals-united
An eight-count indictment has been unsealed in Brooklyn charging a total of seven nationals of the PRC – Quanzhong An, 55, of Roslyn, New York; Guangyang An, 34, of Roslyn, New York; Tian Peng, 38, of the PRC; Chenghua Chen of the PRC; Chunde Ming of the PRC; Xuexin Hou, 52, of the PRC; and Weidong Yuan, 55, of the PRC – with participating in a scheme to cause the forced repatriation of a PRC national residing in the United States. The lead defendant, Quanzhong An, allegedly acted at the direction and under the control of various officials with the PRC’s government’s Provincial Commission for Discipline Inspection (Provincial Commission) – including Peng, Chen, Ming, and Hou – to conduct surveillance of and engage in a campaign to harass and coerce a U.S. resident to return to the PRC as part of an international extralegal repatriation effort known as “Operation Fox Hunt.”
https://www.justice.gov/usao-edny/press-release/file/1545641/download