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 Trump issued Executive Order 13871, Imposing Sanctions With Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran
May 10, 2019 – 84 Fed. Reg. 20761: President Trump issued Executive Order 13871, “Imposing Sanctions With Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran,” that 1) blocks the property of persons determined to have (among other actions) knowingly engaged in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran, and 2) strictly limits the access to the U.S. banking system of foreign financial institutions that knowingly conducted or facilitated such transactions. (See Treasury Department section below for FAQs about this Executive Order.)
President Trump issued Executive Order 13873, Securing the Information and Communications Technology and Services Supply Chain
May 17, 2019 – 84 Fed. Reg. 22689: President Trump issued Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain.” EO 13873 declares a national emergency based on findings that the creation and exploitation by foreign adversaries of vulnerabilities in U.S. information and communications technology (ICT) constitutes an extraordinary threat to the national security, foreign policy, and economy of the U.S. Therefore, it authorizes the Secretary of Commerce to prohibit transactions involving ICT or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary if such transactions pose specified risks to the U.S. (See Commerce Department section below for sanctions against Huawei Technologies Co., Ltd. and related persons implementing this Executive Order.)
Department of Commerce – Bureau of Industry and Security
BIS Adds 12 Entities To The Entity List
May 14, 2019 – 84 Fed. Reg. 21233, corrected by 84 Fed. Reg. 24021 (May 24, 2019): The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) by adding 12 entities to the Entity List (EAR Part 744, Supp. No. 4) based on a determination that each of these entities has acted contrary to the national security or foreign policy interests of the U.S. A license requirement with license review policy of presumption of denial and no available license exceptions will now apply to exports, reexports, or in-country transfers of all items subject to the EAR in transactions in which these entities are purchaser, intermediate consignee, ultimate consignee, or end-user. The 12 entities (under 16 entries in four countries) are:
(1) Avin Electronics Technology Co., Ltd. (AETC), Guangdong;
(2) Longkui Qu, Zhejiang;
(3) Multi-Mart Electronics Technology Co, Ltd. Guangdong, Foshan;
(4) Taizhou CBM-Future New Material Science and Technology Co., Ltd., a.k.a.,: CBM Future, Linhai City, Zhejiang Province;
(5) Tenco Technology Company Ltd., a.k.a.,: Tenco International Co., Ltd.; Shenzhen Tenco Technology Co., Ltd.; and Shenzhen Shengfaweiye Electronic Co., Ltd., Shenzhen, Guangdong; and
(6) Yutron Technology Co. Ltd., Shenzhen, China.
(1) Avin Electronics Technology Co., Ltd. (AETC), Kowloon;
(2) Multi-Mart Electronics Technology Co, Ltd., Kowloon;
(3) Tenco Technology Company Ltd., a.k.a.,: Tenco International Co., Ltd.; Shenzhen Tenco Technology Co., Ltd.; and Shenzhen Shengfaweiye Electronic Co., Ltd., Kowloon and Kowloon Bay; and
(4) Yutron Technology Co. Ltd., Sheung Wan and Shaitin.
(1) IMPEX Trade & Services, 455/A Adamjee Road, Saddar, Rawalpuindi.
United Arab Emirates
(1) Basha Asmath Shaikh, Dubai, U.A.E.;
(2) Emirates Hermes General Trading, a.k.a.: Emirates Hermes General Trading LLC; and Emirates Hermes General Trading Co., Inc., Dubai;
(3) German Sky International Trading Company LLC, a.k.a.,: Civil Trading FZE, Dubai and Ras Al Khaimah;
(4) Manohar Nair, a.k.a.,: Manoharan Nair, Dubai; and
(5) Presto Freight International, LLC, a.k.a Presto Freight International LLC (PFI), Dubai.
In addition, the following entity was removed from the Entity List:
DGL Clearing and Forwarding LLC, U.A.E.
Finally, an alias was added to the following entity:
Modest Marketing LLC, a.k.a.: Argos Composites Trading LLC. Dubai, U.A.E.
BIS Adds Huawei Technologies Co., Ltd. and 68 Non-U.S. Affiliates To The Entity List
May 21, 2019 – 84 Fed. Reg. 22961: (Note: This rule became effective May 16, 2019, when BIS announced it and posted the text of the rule on its website.) BIS amended the EAR by adding Huawei Technologies Co., Ltd. of Shenzhen, Guangdong, China (Huawei) to the Entity List after determining that it was acting contrary to the national security or foreign policy interests of the U.S., including allegations in a Department of Justice indictment of Huawei for violating the International Emergency Economic Powers Act (IEEPA, 50 USC Sec. 1701-1707), conspiring to violate IEEPA by providing prohibited financial services to Iran, and obstruction of justice in connection with the investigation of those alleged sanctions violations.
BIS also added 68 non-U.S. affiliates of Huawei to the Entity List after determining that that they posed a significant risk to these U.S. interests due to their relationship with Huawei. The affiliates are located in Belgium, Bolivia, Brazil, Burma, Canada, Chile, China, Egypt, Germany, Hong Kong, Jamaica, Japan, Jordan, Lebanon, Madagascar, Netherlands, Oman, Pakistan, Paraguay, Qatar, Singapore, Sri Lanka, Switzerland, Taiwan, United Kingdom, and Vietnam. The list of the 68 non U.S. affiliates is available upon request.
As a result of these Entity List designations, exports, reexports, or in-country transfer of all items subject to the EAR in transactions involving Huawei or an affiliate as purchaser, intermediate consignee, ultimate consignee, or end-user will now be subject to a license requirement with a license review policy of presumption of denial, and no license exceptions will be available. (However, see the following item for Temporary General License affecting these sanctions.)
BIS Issues Temporary General License Related To Huawei Technologies Co., Ltd. and 68 Non-U.S. Affiliates
May 22, 2019 – 84 Fed. Reg. 23468: BIS created a Temporary General License in the form of a new Supplement No. 7 to EAR Part 744 authorizing until Aug. 19, 2019, transactions involving exports, reexports, and transfers (in-country) to Huawei and its 68 non-U.S. affiliates for any of four purposes:
Exports, reexports, and in-country transfers of all items subject to the EAR that involve these entities and are not for at least one of these four purposes will continue to require an export license with a license review policy of presumption of denial and no available license exceptions.
BIS Adds Five Developed Or Developing Technologies To The CCL
May 23, 2019 – 84 Fed. Reg. 23886: BIS amended the EAR to add to the Commerce Control List (CCL, EAR Part 774, Supp. No. 1) five recently developed or developing technologies not previously controlled that are essential to the national security of the U.S., as agreed at the December 2018 Plenary meeting of the Wassenaar Arrangement. The additions involve discrete microwave transistors (additions and revisions to Export Control Classification Number (ECCN) 3A001); continuity of operation software (new ECCN 3D005); post-quantum cryptographic algorithms (additions and revisions to ECCN 5A002); underwater transducers designed to operate as hydrophones (additions and revisions to ECCN 6A001); and air-launch platforms (additions and revisions to ECCN 9A004). Other changes agreed at the Wassenaar Arrangement Plenary session will be implemented in a later rule.
BIS Removes Venezuela From Country Group B
May 24, 2019 – 84 Fed. Reg. 24018: BIS amended Supplement No. 1 to EAR Part 740 (Country Groups) to remove Venezuela from Country Group B, thereby rendering it ineligible for export license exceptions LVS (limited value shipments), GBS (shipments to Group B countries), and TSR (technology and software under restriction), and add Venezuela to Country Groups D:1, D:2, D:3, and D:4 (countries of national security, nuclear, chemical and biological, and missile technology concerns, respectively). Consistent with these changes in Country Groups, BIS also amended Supplement No. 1 to EAR Part 738 (the Commerce Country Chart) to add an “X” to Columns NP2 and CB3 of the listing for Venezuela.
Department of State
DDTC Name and Address Changes Posted To Website
Each announcement includes a link to a notice specifying the effects of the change on pending and currently approved authorizations involving the listed entity.
DDTC’s Commodity Jurisdiction Application Is Now Available In DECCS
May 6, 2019: DDTC announced that the Commodity Jurisdiction application is now available on the Defense Export Control and Compliance System (DECCS) Industry Service Portal at . Additional information about the DECCS system is on the DDTC website at .
DDTC Posts Comments About USML Categories IV and XV
May 7, 2019: DDTC posted the comments it had received in response to its request for public comments on U.S. Munitions List (USML, 22 CFR Sec. 121.1) Category IV (Launch Vehicles, Guided Missiles,
DDTC Requests Comments On CJ Form DS-4076
May 13, 2019 – 84 Fed. Reg. 20945: DDTC requested public comments about Form DS-4076, Request for Commodity Jurisdiction. Deadline for comments is June 12, 2019.
DDTC Posts Report On Blue Lantern Checks
Department of the Treasury
OFAC Posted Important Technical Notice Regarding Its Initiation Of A Renewal Of The Public Certificate Securing
May 1, 2019: The Office of Foreign Assets Control (OFAC) posted an “Important Technical Notice” regarding its initiation of a renewal of the public certificate securing the www.treasury.gov website, including OFAC’s sanctions lists downloads, on its website at .
OFAC Published A Framework For OFAC Compliance Commitments To Its Website
May 2, 2019: OFAC published “A Framework for OFAC Compliance Commitments,” which describes the essential components of a sanctions compliance program, provides information on the way in which those components may enter into its evaluation of apparent violations and resolutions of investigations, and describes some of the root causes of apparent violations of U.S. economic and trade sanctions programs. The Framework for OFAC Compliance Commitments is on the OFAC website at .
OFAC Publishes FAQs Regarding Iran-Related Sanctions
May 8, 2019: OFAC published six FAQs about Executive Order 13871 on Iran-related sanctions. (See The President section above.) The FAQs describe the Executive Order and provide information about its effective date, a wind-down period, the scope of the Order, exceptions, and the definition of “significant.” FAQs 666 through 671 are on the OFAC website at .
Department of State
May 22, 2019 – 84 Fed. Reg. 23627: The State Department imposed penalties pursuant to the Iran, North Korea, and Syria Nonproliferation Act (INKSNA, Pub. L. 109–353) against 21 foreign individuals and entities for transfers to, or acquisitions from, Iran, Syria, or North Korea, of items controlled under multilateral control lists or otherwise having specified military potentials. The penalties include a prohibition on exports to these countries of items controlled under the Arms Export Control Act (AECA, 22 USC 2778 et seq.) or the EAR and termination or suspension of any existing licenses for such exports. The sanctioned persons are:
Fines and Penalties
May 15, 2019: Ara Dolarian, a U.S. citizen residing in Sofia, Bulgaria, and the owner and president of Dolarian Capital Inc. (DCI), an arms brokering company operating in Fresno, CA, Washington, DC, and Sofia, Bulgaria, was arrested in Fresno on charges of illegally brokering the sale of military-grade arms and munitions, money laundering, and conspiracy. In 2013 and 2014, DDTC denied DCI’s applications for licenses to broker international arms deals. Without these licenses, Dolarian allegedly attempted to broker a multi-million dollar sale of high-explosive bombs, rockets, military-grade firearms, and aircraft-mounted cannons from Eastern Europe and South Africa to the government of Nigeria. In June 2014, he allegedly executed sales contracts valued at more than $8.5 million for these items with a French arms brokering company acting on behalf of Nigeria and submitted a brokering application to DDTC. Although DDTC did not approve the application, Dolarian allegedly received approximately $8.3 million, part of which was funneled through a purported furniture company in Hong Kong and numerous shell accounts. The U.S. Government seized over $6 million from Dolarian’s accounts in February 2015. Civil forfeiture proceedings relating to the seizure are currently pending.
May 15, 2019: Zurn Industries, LLC of Erie, PA, agreed to pay a $54,000 civil penalty to settle charges by BIS that it had violated the EAR on 27 occasions by failing to report the receipt of a request to engage in an unauthorized boycott. The prohibited requests, which occurred in transactions with Qatar and the United Arab Emirates (UAE) between January 2011 and November 2014, involved certification that the carrying vessel “is allowed by Arab authorities to call at Arabian ports during its voyage to the United Arab Emirates” (for the UAE) or “is permitted to enter Arab ports” (for Qatar).