See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and persons denied export privileges by the United States Government.
Australia Amends Defense Control Act to Bring it in Line with Wassenaar Arrangement
April 2, 2015: An amendment to the Defence Trade Controls Act 2012 affecting the supply and publication of controlled technology and the brokering of controlled goods and technology received Royal Assent. Before passing the amendment, there was a gap under Australian export control law where the transfer of technical information and technology did not require licensing in the same or similar manner as the export of hardware. The changes are described in a Guide to the DTC Bill on the Australian Defence Ministry’s website at http://www.defence.gov.au/deco/_Master/docs/Consultation-Docs/Guide-to-DTC-Bill.pdf. Royal Assent is the process in United Kingdom Commonwealth countries where the Governor General, or other state leader who is a representative of the United Kingdom monarchy, grants or withholds approval for laws enacted by the legislature.
United Kingdom Amends Its Export Control Lists to Provide Clearer Controls on the Export of Firearms
April 17, 2015: The U.K. Export Control Organisation (ECO) announced the amendment of its control lists (Export Control Order 2008, Schedules 1, 2, and 3) to control and rationalize its controls on firearms. Notice to Exporters 2015/16, describing the changes, is on the ECO website at http://blogs.bis.gov.uk/exportcontrol/uncategorized/notice-to-exporters-201516-amendment-to-the-export-control-order-2008-the-main-order-changes-to-schedule-1-2-and-3/.
Department of Commerce Issues EAR Amendment to Address Changes in the EAR Necessitated by Agreements Made by Wassenaar Member Nations in 2014
April 7, 2015 – 80 Fed. Reg. 18522: The Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR, 15 CFR Parts 730-774) to reflect changes to the Missile Technology Control Regime (MTCR) that had been adopted by the MTCR member countries in 2014. The changes affect the following Export Commodity Control Numbers (ECCNs): 1C111, 3A101, 9A106, 9A110, 9A604, and 9A610.
BIS Issues Minor Amendment to the ECCN 6C992 to Clarify Its Controls
April 17, 2015 -- 80 Fed. Reg. 21159: BIS amended ECCN 6C992 to read: “Items: The list of items controlled is contained in the ECCN heading.”
BIS Posts Updated FAQs on Its Website In Line with Obama Administration Decisions to Lift Terrorist Designation of Cuba and to Permit a Broader Range of Exports to Cuba.
April 20, 2015: BIS posted updated Frequently Asked Questions (FAQs) about controls relating to Cuba on its website at http://www.bis.doc.gov/index.php/policy-guidance/faqs.
Various Persons Added to the BIS Restricted Party Lists
April 23, 2015 – 80 Fed. Reg. 22638: BIS added 8 persons under 9 entries to the Entity List (15 CFR Part 744, Supp. No. 4) following the indictment of 5 companies and 5 individuals in connection with illegal exports to Iran. All these persons will be subject to a license requirement for exports of all items subject to the EAR, with a license review policy of denial. The persons added to the Entity List are:
- Shandong Sheenrun Optics & Electronics Co., Ltd., a.k.a. China Sheenrun Optics and Electronics Co. Ltd. and Jinan Sheenrun Electronics Company Ltd., Jinan, China
(1) Abbas Goldoozan, Tehran, Iran (also listed under Turkey);
(2) Arash Servatian, Tehran, Iran;
(3) Elaheh Siahpoush, Tehran, Iran; and
(4) Faratel Company, Tehran, Iran.
(1) Arthur Shyu, Taipei, Taiwan; and
(2) Hosoda Taiwan Limited, Taipei, Taiwan.
(1) Abbas Goldoozan, Istanbul, Turkey 34134 (also listed under Iran); and
(2) Golsad Istanbul Trading, a.k.a. Golsad Import-Export, Istanbul, Turkey.
Department of State Publishes Name & Address Changes for Registrants for April 2015
April 10, 14, 16, 17, 23, 24, 27, and 28, 2015: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at http://www.pmddtc.state.gov/licensing/name_change.html:
- B/E Aerospace Consumables Management Sp. z o.o. Changing to KLX Aerospace Solutions Sp. z o.o. due to corporate restructure;
- T.D. Williamson Algerie EURL Address Change;
- Astrotech Corporation and Astrotech Space Operations, Inc. Changing to Astrotech Space Operations, LLC due to corporate reorganization;
- Academi, LLC and Constellis Group Changing to Constellis Holding LLC due to corporate rebranding;
- Bibby Distribution Limited Address Change;
- Cockerill Maintenance et Ingenierie S.A. Changing to CMI Defence S.A. due to corporate restructure;
- HYDROID EUROPE Address Change;
- NEC Toshiba Space Systems, Ltd. Changing to NEC Space Technologies, Ltd. due to corporate restructure;
- AECOM/GSS, LTD Changing to Global Sourcing Solutions;
- FIFE GROUP (Scotland) Ltd Changing to FIFE GROUP LTD due to corporate restructure;
- Lockheed Martin Canada, Inc. Address Change;
- Selex ES S.p.A, (Italy) Address Change;
- L3 Communications Corporation International Licensing Group (ILG) Address Change; and
- Infoterra GmbH Changing to Airbus DS Geo GmbH due to corporate rebranding.
Each announcement includes a link to a notice specifying the effects of the change on pending and currently approved authorizations involving the listed entity.
State Department Extends Limited Relief for Iran-Related Sanctions Through June 30, 2015
April 16, 2015 – 80 Fed. Reg. 20552: The Department of State extended through June 30, 2015 the limited relief of Iran-related sanctions that has been in effect since November 2013 while the U.S. and its international partners negotiate with Iran on a plan whereby Iran will halt and/or roll back progress on its nuclear program. Transactions with Iran by U.S. persons and foreign entities owned or controlled by U.S. persons generally remain sanctioned, and are not affected by this temporary relief.
State Department Renews Temporary Waivers of Sanctions to Permit the Provision of Satellite Connectivity to Iran
April 23, 2015 – 80 Fed. Reg. 22762: The Department of State renewed temporary waivers of certain sanctions against Iran to permit a specific range of transactions related to the provision of satellite connectivity services to the Islamic Republic of Iran Broadcasting (IRIB).
State Department Publishes List Identifying Items that Can Be Imported from Cuba Under Certain Limitations
April 23, 2015 – 80 Fed. Reg. 22763: The Department of State published a list of goods and services that are eligible for importation from Cuba into the U.S. pursuant to 31 CFR Sec. 515.582, which was added to the Treasury Department Cuban Assets Control Regulations (CACR, 31 CFR Part 515) in January 2015 to implement the President’s liberalized policy on trade with Cuba. The “Section 515.582 List” permits commercial imports of certain goods and services produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence. Goods from certain sections/chapters of the Harmonized Tariff Schedule of the U.S. (HTS) are excluded from eligibility under this rule.
DDTC Publishes Notice Regarding Elimination of Ellie Net and Tracking of Paper Submissions
April 24, 2015: The Directorate of Defense Trade Controls (DDTC) posted a notice describing how industry users will be able to find and track their paper applications, such as General Correspondence Letters and DSP-85 Applications after the “ELLIE Net” system is decommissioned. Filers will be required to provide email addresses as part of the submissions. The notice is on the DDTC website at http://www.pmddtc.state.gov/documents/WebNotice_PaperApplications.pdf.
Department of the Treasury
OFAC Publishes Guidance on Iran Sanctions in Light of Discussions with Iran on Its Nuclear Program
April 3, 2015: The Office of Foreign Assets Control (OFAC) published guidance regarding the sanctions-related consequences of the announcement on April 2, 2015 of parameters for a Joint Comprehensive Plan of Action regarding the Islamic Republic of Iran’s Nuclear Program. A link to this guidance is on the Treasury Department website at http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20150403_33.aspx.
OFAC Releases New Format for Consolidated Sanctions List Data Files
April 6, 2015: OFAC released a new format for its Consolidated Sanctions List Data Files on its website at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/consolidated.aspx#data. In addition to the Specially Designated Nationals List, which had already been released in the new advanced format, the new Consolidated Sanctions List Data Files include the Foreign Sanctions Evaders (FSE) List, Sectoral Sanctions Identifications (SSI) List, Palestinian Legislative Council (NS-PLC) List, the List of Foreign Financial Institutions Subject to Part 561 (the Part 561 List), and the Non-SDN Iranian Sanctions Act (NS-ISA) List. FAQs regarding the new format are at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/advanced_faq.aspx.
OFAC Amends Syrian Sanctions Regulations to Permit Certain Publishing Transactions
April 13, 2015 – 80 Fed. Reg. 19532: OFAC amended the Syrian Sanctions Regulations (31 CFR Part 542) by adding a new general license to authorize certain transactions relating to publishing that are not already exempt from regulation. This general license will not apply if the parties to such transactions include the government of Syria (except academic institutions) or any other person whose property and interests in property are blocked. This general license is at 31 CFR Sec. 542.532.
OFAC Publishes Updated FAQs Related to the Cuba Embargo
April 16, 2015: OFAC published new and updated FAQs about the Cuban Assets Control Regulations on its website at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_new.pdf.
LATEST SANCTIONS FINES & PENALTIES
Department of Commerce
BIS Denies Export Privileges to Precision Image Corp for Illegal Exports Under AECA
April 2, 2015 – 80 Fed. Reg. 17716: BIS denied the export privileges of Precision Image Corp. of Woodinville, WA for 10 years based on its conviction in federal district court in Seattle on Oct. 28, 2013 of violating the Arms Export Control Act (AECA, 22 USC Sec. 2778) by exporting technical data controlled under Category XII(f) of the U.S. Munitions List (USML, 22 CFR Sec. 121.1) without the required authorization. In the criminal case, Precision was sentenced to 3 years of probation and ordered to pay a criminal fine of $300,000 and an assessment of $400.
BIS Denies Export Privileges to Ivon Castaneda for Violating the AECA By Illegally Exporting Firearm Barrels to Honduras
April 2, 2015 – 80 Fed. Reg. 17718: BIS denied the export privileges of Ivon Castaneda, currently an inmate in federal prison in Coleman, FL for 10 years based on his conviction in federal district court in the Southern District of Florida on Dec. 18, 2012 of violating the AECA by conspiring and attempting to export firearm barrels and other items controlled under the AECA to Honduras without the required authorization. In the criminal case, Castaneda was sentenced to 37 months of imprisonment and 2 years of supervised release and ordered to pay an assessment of $200.
BIS Denies Export Privileges to Erik Antonio Perez-Bazan for Violating the AECA by Illegally Exporting Grenade Launcher Barrels to Mexico
April 2, 2015 – 80 Fed. Reg. 17722: BIS denied the export privileges of Erik Antonio Perez-Bazan, currently an inmate in federal prison in Bastrop, TX, for 10 years based on his conviction in federal court in the Southern District of Texas on Sep. 15, 2014 of violating the AECA by conspiring, attempting, and causing the export of grenade launcher barrels and other defense articles to Mexico without the required authorization. In the criminal case, Perez-Bazan was sentenced to 75 months of imprisonment and 3 years of supervised release and ordered to pay a $100 assessment.
BIS Denies Export Privileges to Ronald Alexander Dobek for Violating the AECA by Illegally Exporting F-16 Canopy Seals to Venezuela
April 2, 2015 – 80 Fed. Reg. 17724: BIS denied the export privileges of Ronald Alexander Dobek, currently an inmate in federal prison in Duluth, MN, for 10 years based on his conviction in federal court in the Eastern District of Wisconsin on Sep. 10, 2014 of violating the AECA by conspiring and attempting to export, exporting, and causing to be exported F-16 canopy seals controlled on the USML to Venezuela without the required authorization. In the criminal case, Dobek was sentenced to 84 months of imprisonment and 3 years of supervised release and ordered to pay a $300 assessment.
BIS Denies Export Privileges to Brian Keith Bishop for Violating the AECA by Illegally Exporting Ammunition to Jordan
April 2, 2015 – 80 Fed. Reg. 17725: BIS denied the export privileges of Brian Keith Bishop of Dulles, VA for 5 years based on his conviction in federal court in the Eastern District of Virginia on May 7, 2013 of violating the AECA by attempting to export approximately 7,496 rounds of 9mm and 7.62 x 39mm ammunition to Jordan without the required authorization. In the criminal case, Bishop was sentenced to 2 years of probation with 6 months home confinement and ordered to pay a criminal fine of $25,000 and a $100 assessment.
BIS Renews Temporary Denial Order Against X-TREME Motors LLC and EXTREME Outdoor Store and Their Owners for Repeated Unauthorized Exports Under the EAR
April 2, 2015 – 80 Fed. Reg. 17726: BIS renewed a Temporary Denial Order (TDO) against X-TREME Motors LLC and EXTREME Outdoor Store, both of West Haven, Utah, and Tyson Preece, Corey Justin Preece, and Toby Green, all of Morgan, Utah, based on their repeated exportation of items controlled under the EAR for Crime Control reasons.
BIS Issues Denial of Export Privileges Order in Yayuz Cizmeci for Illegal Export of Boeing 747 to Iran via Turkey
April 3, 2015 – 80 Fed. Reg. 18194: BIS imposed a 20-year denial order on Yavuz Cizmeci, President and Chief Executive Officer of Ankair, a Turkish charter airline, for facilitating the re-export of a Boeing 747 aircraft from Turkey to Iran shortly after Ankair had been notified that a TDO had been imposed on it to prevent this transfer. Cizmeci submitted false documents to Turkish authorities claiming that the plane was bound for Pakistan, when in fact it was destined for Tehran, Iran. Cizmeci also agreed to pay a civil fine of $50,000 in partial settlement of these charges.
Fines and Penalties
Hanna Robert Pleaded Guilty to Violating the AECA by Exporting F-15 Technical Data Illegally to India
April 1, 2015: Hanna Robert of North Brunswick, NJ pleaded guilty in federal court in New Jersey to conspiracy to violate the AECA by exporting ITAR-controlled military technical drawings without the required authorization from the State Department. Robert owned a company, One Source USA, LLC, that contracted with the U.S. Department of Defense to supply defense hardware items and spare parts in 2010. Subsequently, through companies she established in New Jersey and India, she conspired to export, and did export, the drawings for military parts including parts used in the torpedo systems for nuclear submarines and F-15 fighter aircraft to India so that the Indian company could submit bids to supply foreign customers with defense hardware items. Robert allegedly transmitted the drawings to India by posting them on the website of a church at which she was a volunteer web administrator. In other counts in the same indictment, Robert was also accused of submitting fraudulent bids to the U.S. Department of Defense. Sentencing is scheduled for June 26, 2015.
AMA United Group, Malak Neseem Swares Boulos, and Amged Kalel Yonan Tawdraus Pleaded Guilty to Violating the AECA by Exporting ITAR-Controlled Parts for Aerial Warheads to Egypt
April 2, 2015: AMA United Group, Malak Neseem Swares Boulos, and Amged Kalel Yonan Tawdraus pleaded guilty in Brooklyn, NY federal court of failing to file required export information in connection with the attempted shipment to Egypt of ITAR-controlled components integral to the manufacture of housings for explosives in an aerial warhead. Boulos and Tawdraus are Egyptian citizens and partners in AMA United Group. When sentenced, Boulos and Tawdraus face up to 5 years in prison, plus criminal forfeiture and fines. All 3 defendants also face possible denials of export privileges by the U.S. Departments of Commerce, State, and Treasury.
Bahram Mechanic, Tooraj Faridi, and Khosrow Aghahi Indicted for Exporting Microelectronics Usable in Missiles to Iran
April 17, 2015: Bahram Mechanic, a naturalized U.S. citizen resident in Houston, TX, Tooraj Faridi, also of Houston, and Khosrow Afghahi of Los Angeles, CA, along with two other individuals and 4 companies were indicted on charges of facilitating the illegal export to Iran of microelectronics usable in cruise missiles, uninterruptible power supplies, and other commodities in violation of the International Emergency Economic Powers Act (IEEPA, 50 USC 1701-1707). The indictment alleges an Iranian procurement network that operated over a period of 5 years and exported items valued at over $24 million to Iran via Taiwan and Turkey. Mechanic allegedly was investigated for illegal trading activities at least 3 times since 1985 and was convicted in the 1980s of attempting to export a microwave calibration device without a validated export license. Mechanic, Faridi, and Afghahi are in U.S. custody. The remaining defendants are identified as Arthur Shyu of Taiwan; Matin Sadeghi of Turkey; Faratel Corporation of Iran, co-owned by Mechanic and Afghahi; Smart Power Systems, Inc. of Houston; Hosoda Taiwan Co. Ltd. of Taiwan; and Golsad Istanbul Trading Ltd. of Turkey.
Morex, Inc. Pays Civil Penalty for Violating Anti-boycott Provisions of the EAR
April 22, 2015: Morex, Inc., of Charlotte, NC agreed to pay a civil penalty of $25,200 to settle charges by BIS that it violated the antiboycott provisions of the EAR (15 CFR Part 760) by furnishing information about another person’s business relationships with a boycotted country in connection with transactions with Qatar and the United Arab Emirates (UAE) and by failing to report the receipt of a boycott request against a country friendly to the U.S. in connection with transactions with Pakistan.
Arash Ghahreman Convicted of Violating U.S. Export and Money Laundering Laws for Transactions Involving the Illegal Export of Marine Navigation Equipment and Military Electronics to Iran
April 23, 2015: Arash Ghahreman of Staten Island, NY, a U.S. citizen and former national of Iran, was convicted by a jury in federal court in the Southern District of California of 7 charges of violations of U.S. export control and money laundering laws arising from his involvement in a scheme to purchase marine navigation equipment and military electronic equipment for illegal export to Iran. Ghahreman and two co-defendants carried out the scheme through a front company in Dubai. Co-defendant Ergun Yildiz, a German national resident in the UAE pleaded guilty to conspiracy in the scheme on Oct. 9, 2014. Co-defendant Koorush Taherkhani, an Iranian national and resident, remains a fugitive. TIG Marine Engineering Services of Dubai, the front company for the operation, is also named as a co-defendant in the case.
Bo Cai and Wentong Cai Convicted and Sentenced to Prison for Violating the AECA by Exporting Military Sensors to China
April 23, 2015: Bo Cai, of Nanjing, China was sentenced in federal court in New Mexico to 24 months in federal prison and his cousin Wentong Cai of Chifeng, China was sentenced to 18 months in federal prison based on their conviction of violating the AECA and the ITAR by scheming to export sensors manufactured primarily for sale to the U.S. Department of Defense for use in high-level applications such as line-of-sight stabilization and precision motion control systems. The men were caught in a sting operation after undercover U.S. Immigration and Customs Enforcement agents responded to overtures from Wentong Cai. After negotiations, the defendants obtained a sensor from the agents and developed a plan to smuggle it out of the U.S. Bo Cai was arrested at an airport in Los Angeles as he prepared to board a flight to China after the sensor was discovered concealed in a computer speaker in his luggage. Wentong Cai was subsequently arrested in Ames, Iowa.
Kirby Santos Charged with Conspiracy to Violate the AECA by Selling Firearms Parts to the Philippines without Export Approval
April 27, 2015: Kirby Santos of the Republic of the Philippines was charged in federal court in New Jersey with conspiracy to violate the AECA by selling firearms parts to the Philippines without the required authorization. According to the criminal complaint, Santos arranged for suppliers to ship the parts to an unnamed co-conspirator’s address in Toms River, NJ, to make the sales appear domestic. The co-conspirator then shipped them to Philippines in packages whose contents were not properly identified. In this manner Santos purchased and directed the illegal export of more than $200,000 worth of defense articles over a period of almost 5 years.
Russell Henderson Convicted and Sentenced to Prison for Violating the IEEPA and the Terms of a Denial Order Related to Illegal Exports of F-16 Parts to Thailand and J-69 Engine Parts to Pakistan
April 27, 2015: Russell Henderson Marshall of Palm Beach County, FL was sentenced in federal court in the Southern District of Florida to serve 41 months in federal prison for violating IEEPA and violating the terms of a denial order issued by the U.S. Department of Commerce. Marshall will be removed from the U.S. upon completion of his sentence. Marshall’s company, Universal Industries Limited Inc., which became inactive as a result of Marshall’s arrest, was sentenced to a term of one year probation and a special assessment of $400. The convictions resulted from a complaint on the hotline of the U.S. Department of Defense Inspector General. The subsequent investigation revealed that Marshall and Universal had attempted to send parts for F-16 fighter jets to Thailand and parts for the J-69 engine used on 737 military trainer aircraft to Pakistan, thereby violating a denial order that had been issued against them following their convictions for violating the AECA in an earlier case in 2011.