LATEST EXPORT CONTROLS AND COMPLIANCE UPDATE
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
President Continues Authority For The Cuban Assets Control Regulations
Sep. 12, 2018 – 83 Fed. Reg. 46347: President Trump continued the authority for the Cuban Assets Control Regulations (CACR, 31 CFR Part 515) until Sep. 14, 2019, after determining that the exercise of certain authorities under the Trading With the Enemy Act (TWEA, 50 USC App. Secs. 5 and 16) with respect to Cuba is in the U.S. national interest. The authority for the CACR would otherwise have expired on Sep. 14, 2018.
President Issued Exectuve Order 13848 “Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election.”
Sep. 12, 2018 – 83 Fed. Reg. 46843: President Trump issued Executive Order 13848, “Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election.” This EO calls for a detailed interagency assessment of foreign interference in an election including recommendations regarding remedial actions to be taken by the USG. Sanctions subsequently imposed under EO 13848 could target foreign persons who were directly or indirectly involved in foreign interference in a U.S. election, those who materially assisted such acts, and those who were owned or controlled by, or acted or purported to act for, directly or indirectly, any person whose property or interests in property are blocked pursuant to the EO. Possible sanctions include blocking property, placing persons on the Treasury Department Specially Designated National and Blocked Persons List (SDN List, https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx ), suspending entry into the U.S., and many others. The EO does not identify any specific targeted country.
President Issued Executive Order 13849, “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act.”
Sep. 21, 2018 – 83 Fed. Reg. 48195: President Trump issued Executive Order 13849, “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act.” This EO authorizes the Treasury Department, State Department, and other USG agencies to fully implement the sanctions against Russia specified in CAATSA (Public Law 115-44) and the Ukraine Freedom Support Act of 2014 (Public Law 113-272), including, among others, prohibitions on certain financial transactions, blocking property and interests in property, denial of Export-Import Bank assistance, denial of export licenses, denial of visas and entry into the United States, and imposition of sanctions on the principal executive officer or officers of sanctioned persons. See Treasury Department section below for Frequently Asked Question (FAQ) summarizing the purpose and provisions of EO 13849 and Sanctions section below for actions related to this EO. Additional information about EO 13849 and sanctions imposed under it against Russian and Chinese entities is in State Department briefing at https://www.state.gov/r/pa/prs/ps/2018/09/286083.htm.
BIS Amended The Entity List
Department of Commerce – Bureau of Industry and Security
Sep. 4, 2018 – 83 Fed. Reg. 44821, corrected by Sep. 12, 2018 – 83 Fed. Reg. 46103 and Sep. 13, 2018 – 83 Fed. Reg. 46391: The Bureau of Industry and Security (BIS) amended the Entity List (15 CFR Part 744, Supp. No. 4) by adding 15 entities under 17 entries in the People’s Republic of China (PRC), Hong Kong, Pakistan, Russia, Saudi Arabia, Turkey, the United Arab Emirates (UAE) and the United Kingdom (UK); modifying 2 entries in Hong Kong and Russia; and removing one entity in Greece.
The following persons were added to the Entity List:
(1) Ma Yunong, a.k.a., the following one alias: George Ma, Beijing and Guangzhou, and
(2) Seajet Company Limited, Beijing, Guangzhou, and Tianjin;
(1) Calvin Law, Kwai Chung, N.T.,
2) CLC Holdings Limited, a.k.a., the following one alias: CLC Xpress, Kwai Chung, N.T.,
(3) LHI Technology (H.K.) Company Limited, Kwai Chung,
(4) Ray Hui, Kwai Chung, N.T., and
(5) ZM International Company Ltd., Sheung Wan;
(1) Technology Links Pvt. Ltd., a.k.a., the following two aliases: Techlinks and Techlink Communications, Karachi and Lahore, and
(2) UEC (Pvt.) Ltd., Lahore and Karachi (See alternate addresses under Saudi Arabia and UAE);
(1) Joint Stock Company (JSC) NIIME, a.k.a., the following two aliases: Aktsionernoe Obshchestvo (AO) Nauchnoisledovatelskiy Institut Molekulyarnoy Elektroniki (NIIME); and Molecular Electronics Research Institute (MERI), Zelenograd;
(1) UEC (Pvt.) Ltd., Riyadh (See alternate addresses under Pakistan and UAE.);
Danismanlik SAN. TIC. LTD. ST., Antalya, and
(2) Huseyin Engin Borluca, Antalya;
United Arab Emirates:
1) Good Luck Shipping LLC, a.k.a., the following two aliases: Good Luck Shipping Services; and GLS, Bur Dubai and Dubai,
(2) Techcare Services FZ LLC, Al-Jazeera Al Hamra, and
(3) UEC (Pvt.) Ltd., Abu Dhabi (See alternate addresses under Pakistan and Saudi Arabia); and
(1) Evans Meridians Ltd., Tortola, British Virgin Islands.
For all these entities BIS imposed a license requirement for all items subject to the EAR with a license review policy of presumption of denial, and no license exceptions will be available for exports, reexports, or in-country transfers to them. The license requirements apply to any transaction in which items subject to the EAR are to be exported, reexported, or transferred (in-country) to any of the listed entities or in which such an entity acts as purchaser, intermediate consignee, ultimate consignee, or end-user.
The following person was removed from the Entity List:
(1) Top Electronics Components S.A., Athens.
The name, alias, and/or address of the following entities were modified:
(1) Joinus Freight Systems (H.K.) Limited, a.k.a., the following two aliases: JFS Global Logistics and Joinus Freight Systems Global Logistics Limited, Kwai Chung; and
(1) Joint Stock Company (JSC) NIIME, a.k.a., the following two aliases: Aktsionernoe Obshchestvo (AO) Nauchnoisledovatelskiy Institut Molekulyarnoy Elektroniki (NIIME) and Molecular Electronics Research Institute (MERI), and
(2) PJSC Mikron, Zelenograd.
BIS Requests Comments On Procedures For Duplicate, Lost Or Destroyed Licenses
Sep. 14, 2018 – 83 Fed. Reg. 46703: BIS requested comments from the public about its procedures for obtaining a duplicate license when a license is lost or destroyed, as prescribed in EAR Sec. 750.9, and transferring ownership of a validated export license, as prescribed in EAR Sec. 750.10. Comments are due by Nov. 13, 2018.
BIS Requests Comments On Procedures For Export Of Agricultural Commodities To Cuba
Sep. 17, 2018 – 83 Fed. Reg. 46912: BIS requested comments from the public about the effectiveness of its licensing procedures for the export of agricultural commodities to Cuba, as prescribed in EAR Sec. 740.18. Comments are due by Oct. 17, 2018.
BIS Amended The Entity List
Sep. 26, 2018 – 83 Fed. Reg. 48532: BIS amended the Entity List by adding 14 entities under 16 entries in Belarus, Iran, Russia, and Singapore, modifying 1 entry under the UAE, and removing one entity under Hong Kong.
The following persons were added to the Entity List:
(1) Mohammad Ghassem Najafi, Minsk, and
(2) Nilco Group, a.k.a., the following one alias: Nilfam Khazar Co., Minsk (See alternate addresses under Iran and Russia;
(1)Nilco Group, a.k.a., the following one alias: Nilfam Khazar Co., Tehran (See alternate addresses under Belarus and Russia);
(1) AeroComposit, Ulyanovsk,
(2) Divetechnoservices, a.k.a., the following five aliases: OOO Divetechnoservice; OOO Daivtekhnoservis; OOO Dayvtekhnoservis; OOO NPP DTS; and OOO DTS, Saint Petersburg,
(3) Federal State Unitary Enterprise Scientific Production Enterprise ‘‘GAMMA’’, Moscow,
(4) Joint Stock Company Scientific-Research Institute ‘‘Vektor’’, Saint Petersburg,
(5) Nilco Group, a.k.a., the following one alias: Nilfam Khazar Co., Moscow (See alternate addresses under Belarus and Iran),
(6) Obinsk Research and Production Enterprise (ORPE), a.k.a., the following three aliases: ORPE Technologiya; ONPP Technologiya; and Obinsk Composite Materials Plant, Obinsk,
(7) Oceanos, Saint Petersburg,
(8) Open Joint Stock Company Aviadvigatel, a.k.a., the following one alias: AVI, Perm,
Open Joint Stock Company Information Technology and Communication Systems, a.k.a., the following two aliases: OJSC Infoteks; and OJSC Infotecs, Moscow,
(9) Open Joint Stock Company Scientific and Production Corporation of Precision Instruments Engineering (NPK– SPP), a.k.a., the following one alias: OJC RPC PSI, Moscow, and
(10) Voronezh Scientific Research Institute ‘‘Vega‘‘, a.k.a., the following two aliases: Voronezhskiy NauchnoIssledovatelskiy Institut ‘‘Vega‘‘; and VNII Vega Voronezh; and
(1) All Industrial Manufacturing (AIM) Pte Ltd., Singapore.
For all these entities BIS imposed a license requirement for all items subject to the EAR with a license review policy of presumption of denial (except the license review policy for Singapore will be according to EAR Sec. 744.2(d)), and no license exceptions will be available for exports, reexports, or in-country transfers to them. The license requirements apply to any transaction in which items subject to the EAR are to be exported, reexported, or transferred (in-country) to any of the listed entities or in which such an entity acts as purchaser, intermediate consignee, ultimate consignee, or end-user.
The following person was removed from the Entity List:
(1) Antony Emmanuel, Tsim Sha Tsui.
The aliases of the following entity were modified:
United Arab Emirates:
(1) AdCom Systems, a.k.a. the following two aliases: Sky Global Communications, and Sky Global Communication Systems, Abu Dhabi.
DDTC Name and Address Changes Posted To Website
Department of State
Sep. 18, 21, 24, 25, and 26, 2018: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at https://www.pmddtc.state.gov/?id=ddtc_kb_article_page&sys_id=bd72ca0adbf8d30044f9ff621f961981:
• Changes in names of Singapore Technologies entities due to alignment of ST Engineering brand name:
o From Singapore Technologies Engineering Ltd. to ST Engineering Aerospace Ltd.,
o From Singapore Technologies Aerospace Ltd. to ST Engineering Aerospace Ltd.,
o From Singapore Technologies Electronics Limited to ST Engineering Electronics Ltd.,
o From Singapore Technologies Kinetics Ltd. to ST Engineering Land Systems Ltd., and
o From Singapore Technologies Marine Ltd. to ST Engineering Marine Ltd.;
• Change in name from MyungJin Systems, Inc. to R&M TEK, Inc.;
• Change in names of Rolls-Royce Power Engineering Plc and Rolls-Royce Marine Power Operations Limited to Rolls-Royce Submarines Limited due to consolidation;
• Change in address for Sumitomo Corporation;
• Change in name from QinetiQ Holdings Canada Inc., QinetiQ Target Systems Canada Inc., and QinetiQ Canada Operations Limited to QinetiQ Group Canada Inc.;
• Change in address for Barry International Forwarders, Inc.;
• Change in name from ELV S.p.A to AVIO S.p.A. due to acquisition;
• Change in name from 3 Phoenix, Inc. (3Pi) to Ultra Electronics Ocean Systems, Inc. (UEOS) due to restructuring/merger; and
• Address change for C4 Advanced Tactical Systems.
Each announcement includes a link to a notice specifying the effects of the change on pending and currently approved authorizations involving the listed entity.
OFAC Publisehd FAQs Regarding Ukraine-Russia General Licenses
Department of the Treasury
Sep. 14, 2018: The Office of Foreign Assets Control (OFAC) published two new FAQs to provide guidance on “maintenance” as that term is used in Ukraine-Russia General Licenses (GLs) 14, 15, and 16. FAQs 625 and 626 are on the Treasury Department website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#625.
OFAC Published FAQ Regarding EO 13849 “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act”
Sep. 20, 2018: OFAC published a FAQ describing the purpose of EO 13849 “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act” (see The President section above) and summarizing its main provisions. The FAQ notes that OFAC anticipates promulgating regulations to implement the sanctions provided in the EO. FAQ 627 is on the Treasury Department website at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#627.
OFAC Issued Ukraine-Related General Licenses
Sep. 21, 2018: OFAC issued Ukraine-Related GLs Nos. 13D, 14A, and 16A, which amended their previous versions by extending their expiration date from Oct. 23, 2018, to Nov. 12, 2018. All three GLs relate to transactions related to EN+ Group PLC, United Company RUSAL PLC, GAZ Group, JSC EuroSibEnergo, and their subsidiaries.
Department of State
Sep. 19, 2018 – 83 Fed. Reg. 47390: DDTC corrected the sanction issued against Russia on Aug. 27, 2018, under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (22 USC 5604(a) and 5605(a)). (See description of this rule in August 2018 Regulatory Update.) The original version of this waiver applied to exports of national security-sensitive goods and technology to wholly-owned U.S. subsidiaries in Russia. This amendment expands the scope of the waiver to cover exports to “wholly-owned U.S. and other foreign subsidiaries” in Russia.
Sep. 20, 2018: The Secretary of State added 6 Russian entities and 27 Russian individuals to the CAATSA Section 231(d) List Regarding the Defense and Intelligence Sectors of the Government of the Russian Federation (Sec. 231(d) List). Inclusion on this list does not automatically activate sanctions; however, any person determined to have knowingly engaged in a “significant” transaction with any of these persons is subject to sanctions under CAATSA section 231. The Section 231(d) List is on the State Department website at https://www.state.gov/t/isn/caatsa/275116.htm. Additional information about this action is at https://www.state.gov/t/isn/caatsa/275118.htm and https://www.state.gov/r/pa/prs/ps/2018/09/286077.htm.
Sep. 20, 2018: The Secretary of State, in consultation with the Secretary of the Treasury, imposed sanctions pursuant to CAATSA Sec. 231, including a denial of U.S. export licenses, on a Chinese entity, Equipment Development Department (EDD) and its director, Li Shangfu, for engaging in significant transactions with Russia’s main arms export entity, Rosoboronexport (ROE), a person on the Sec. 231(d) List. (EDD and Li were also added by OFAC to the SDN List.) Additional information is on the State Department website at https://www.state.gov/r/pa/prs/ps/2018/09/286077.htm.
Fines and Penalties
Sep. 4, 2018: Alexis Vlachos of Montreal, Quebec, was sentenced in U.S. District Court in Vermont to 51 months imprisonment based on his plea of guilty of conspiring to export, and actually exporting, over 100 handguns, from Vermont to Quebec, without the required license from the State Department. Some of the smuggled firearms were transferred to Canada by being stashed by U.S. coconspirators in a bathroom of a library building that straddles the international border between Vermont and Quebec, and then retrieved from the Canadian side of the building by Vlachos. On another occasion, a coconspirator purchased 34 firearms in the U.S., and Vlachos and the coconspirator then hiked them from a remote section of northeastern Vermont across the border into Quebec.
Sep. 5, 2018: Ferdi Murat Gul, a/k/a “Fred Gul,” of Turkey, the owner and general manager of a defense contracting business and a purported manufacturing company in New Jersey, was indicted by a federal grand jury for conspiracy to commit wire fraud, actual wire fraud, and conspiracy and actual violation of the Arms Export Control Act (AECA, 22 USC 2778 et seq.) involving hundreds of contracts with the Department of Defense for parts for torpedoes for the U.S. Navy, bomb ejector racks, armament utilized in U.S. Air Force aircraft, firearms, mine clearance systems, and other military parts with an alleged aggregate value of approximately $7 million. Gul and his coconspirators allegedly promised that the military parts would be made in the U.S., but actually produced them in Turkey. To produce the parts in Turkey, they allegedly routinely and unlawfully exported drawings and technical data, some of which was subject to the AECA. Gul is believed to be at large in Turkey.
Sep. 19, 2018: Imran Khan, of North Haven, CT, was sentenced in U.S. District Court in Bridgeport, CT, to 3 years of probation, the first 6 months of which must be served in home confinement, 100 hours of community service, and a $3,000 fine based on his June 1, 2017, plea of guilty of violating the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701 - 1707) by procuring, receiving, and exporting an Alpha Duo Spectrometer to the Pakistan Atomic Energy Commission, an entity listed on the Entity List, without the required license from the Commerce Department. Khan’s actions were allegedly part of a larger scheme of unauthorized exports to the Pakistani military that also involved his father, Muhammad Ismail, and his brother, Kamran Khan. Ismail and Kamran Khan were both sentenced to 18 months of imprisonment on July 18, 2018. See additional information in June 2017 and July 2018 Regulatory Updates.