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Export Controls & Sanction Watch - Edition 13-24

Updated: Apr 9, 2024

Edition 13 - 2024 - Week 14/15 of your blog-style export controls & sanctions update for EC&S community members. Watch period: 04.04.2024 - 09.04.2024




Feature Article:


WTO: Download Book - Export Control rules worldwide analysed.

WTO: Download Book - Export Control rules worldwide analysed.


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UN Panel of Experts report on Haiti sanctions

The UN Haiti Sanctions Committee Panel of Experts has published an interim report on the period 13 November 2023 to 15 February 2024.

Key points:

  • despite the imposition of UN sanctions, which were, according to the report, received positively by the Haitian population, gang violence has reached unprecedented levels and designated gang leaders continue to engage in intense armed violence; and

  • despite the imposition and renewal of a territorial arms embargo, gangs and other non-State actors continue to procure arms and ammunition illicitly, including from the US and Dominican Republic.


UN panel of experts report on DPRK sanctions


The UN DPRK Sanctions Committee Panel of Experts (the renewal of which Russia recently vetoed) has published a report on the effectiveness of sanctions in the DPRK.

Significant Points:

  • The Democratic People's Republic of Korea (DPRK) persists in its violations of UN sanctions, notably by expanding its nuclear arsenal, producing nuclear materials, smuggling refined petroleum products, and exploiting the international financial system unlawfully.

  • To circumvent maritime sanctions, DPRK utilizes deceptive tactics such as providing false destination reports, manipulating AIS identifiers, falsifying documentation, and engaging in covert ship-to-ship transfers under cover of darkness.

  • DPRK's trade activities are on the rise, particularly its exchanges with Russia, alongside an influx of diverse foreign luxury goods into the country. There are ongoing investigations into allegations of weapons supply to DPRK.

  • The unintended consequences of UN sanctions extend to the humanitarian situation in DPRK, exacerbated by overcompliance with sanctions and delays in procurement processes. These unintended effects exacerbate the already dire circumstances in the region.


The UK Parliament's Investigation into the Israel-Hamas Conflict and Sanctions Response

The UK House of Commons Library has published a research briefing on the Israel-Hamas conflict and the UK and international response, including the use of sanctions since 7 October 2023.


EU Commission's Latest Update: Clarifications on Russia Sanctions FAQs Regarding Prohibited Services


Here are the key takeaways from the updated FAQs:

  • EU subsidiaries are strictly prohibited from offering prohibited services to their Russian parent companies.

  • EU individuals retain the ability to provide all services that are not explicitly banned while operating in their roles as employees of Russian entities.

  • The prohibition extends to non-Russian branches of Russian entities lacking independent legal status.

  • Services extended to Russian entities solely or jointly owned by EU entities (or partner countries) are exempt from the prohibition until June 20, 2024. However, after this date, operators must secure authorization from the relevant national competent authority to continue offering restricted services. For instance, reference to the German general authorization may be necessary.

  • The term "IT consultancy services" encompasses guidance or support concerning software updates and enhancements. However, it does not cover the provision of automatic software updates to previously acquired software, unless the software is customized.

  • Providing prohibited services to Russian entities through EU operators' subsidiaries situated in third countries may be construed as an indirect provision of these services, thus falling under the purview of the prohibition.


These updates reflect the EU Commission's ongoing efforts to enforce and clarify sanctions against Russia, underscoring the importance of compliance with regulatory directives in international business operations.


OFSI's Latest Insights: Navigating Sanctions in the Maritime Sector

On April 5, 2024, OFSI (Office of Financial Sanctions Implementation) released a comprehensive blog post offering invaluable guidance for maintaining sanctions compliance within the maritime industry. Here's a breakdown of their key recommendations:

  1. Thoroughly vet the identity of customers, partners, and third-party intermediaries, taking into account all layers of ownership and control to ensure transparency and mitigate risk.

  2. Establish and enforce robust compliance policies, complemented by ongoing training and awareness programs for personnel. Investing in cutting-edge technology and screening tools can further bolster compliance efforts.

  3. Foster collaboration with industry stakeholders, regulatory bodies, and law enforcement agencies to stay informed about evolving sanctions requirements and best practices, thus enhancing overall compliance measures.

OFSI's insights underscore the critical importance of proactive measures and cooperation in navigating the complex landscape of sanctions within the maritime sector. By adhering to these guidelines, businesses can fortify their compliance frameworks and safeguard against potential regulatory breaches.


Update to OFAC's list of Specially Designated Nationals (SDN) and Blocked Persons

The SDN list has recently been updated.  Please visit this page to access the latest version of the SDN list.  Check this page periodically as it may also be updated if a new list-related format or product is offered.


Revision of UK Export Control List published

A revised version of the Consolidated List of strategic military and dual-use items that require export authorization has been published by the Export Control Joint Unit and Department for Business and Trade. This updated list, last modified on April 3, 2024, replaces the previous version and provides essential guidance for businesses involved in exporting goods, software, and technology. The Consolidated List comprises items subject to control under various pieces of international legislation, encompassing goods with military applications, dual-use items, associated technology and software, as well as goods that might be utilized for purposes such as torture or radioactive sources. It is imperative for businesses to assess their products against this list to determine whether they require a license for export.

Utilizing online checker tools, businesses can ascertain if their items are controlled, identify the relevant control entry references within the Consolidated List, and check for the availability of appropriate open general export licenses (OGELs). If an item falls under a controlled entry, an export license from the Export Control Joint Unit (ECJU) is necessary.

Furthermore, even if goods are not explicitly listed, businesses may still require a license under end-use controls, particularly if there are concerns regarding their potential use in weapons of mass destruction (WMD) programs. Updates to the UK strategic export control lists typically occur biannually, and it is the responsibility of businesses to stay informed about recent revisions, ensure they have the latest version of the list, and take necessary steps to obtain licenses where required. This proactive approach helps businesses maintain compliance with export regulations and contributes to the responsible and lawful exportation of goods, software, and technology. Here.


Navigating New Export Controls: Updates and Clarifications on Advanced Computing and Semiconductor Items

Commerce/BIS Issues Interim Rule Implementing Additional Export Controls on Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections; and Export Controls on Semiconductor Manufacturing Items; Corrections and Clarifications


The Bureau of Industry and Security (BIS), a branch of the United States Department of Commerce, has introduced an interim final rule aimed at refining export controls on advanced computing and semiconductor items. Published in the Federal Register on April 4, 2024, this rule addresses inadvertent errors and provides additional clarity on previous regulations, particularly concerning supercomputer and semiconductor end-use considerations. Stemming from previous rules issued on October 25, 2023, the interim final rule emphasizes the importance of seeking public input, inviting comments and suggestions to refine export control measures. By actively engaging stakeholders and addressing regulatory nuances, the BIS demonstrates its commitment to fostering responsible trade practices while ensuring national security interests are upheld amidst rapid technological advancements.


DoD/DSCA Policy Memos of Interest

 

DSCA Policy Memo 24-09, Non-Specific Requirements Lines has been posted.

Effective immediately, this memorandum updates and clarifies policy on the use of Non-Specific Requirements lines in Foreign Military Sales (FMS) cases. Non-Specific Requirements lines are used only with a specific MASL, "R9B 079200N0NSPRQ, Non-Specific Requirements," on FMS cases when requested by or coordinated with the FMS purchaser as a holding place for funds budgeted, but not yet programmed.

This memo:


Upcoming Export Control and Sanctions Training


Learn the essentials of sanctions, dual-use products and export limits to avoid expensive fines. Our training will be advantageous to any US and non-US firm engaging in international trade, especially concerning items of US origin. Our training helps prevent expensive export control and sanctions fines. It imparts essential knowledge that personnel responsible for export controls and sanctions compliance must grasp.


Sanctions

This course develops professionals' competencies to deal with all key compliance aspects of sanctions laws and policies. Using examples from the EU, the UK and the U.S., we will explore how to check entities, individuals, and organisations against sanctions lists, set up an effective restricted party screening programme, and identify economic trade sanctions and how your products may be affected by it. We will determine due diligence requirements and how you can locate attempts for circumvention. We will discuss applying for a sanction’s exemption licence, a licence exception / general licence. Includes a discussion around red flags and how to set up a sanctions policy and programme. Special feature: Participants will workshop through real sanctions’ case studies and explain the action they would take to ensure compliance.


Dates (Click To Book)


Export Controls

This course develops the competencies that professionals need to deal with the four fundamental aspects of export controls: Product, Destination, End-User and End-Use Controls. Using examples from the EU, the UK and the U.S., we will explore how to determine if an item is subject to export controls and detail the steps to acquire an export control licence and/to apply for a licence exception / general licence. Includes a discussion around red flags and Internal Export Compliance Programmes (ICP/ECP). Special feature: A hands-on workshop where you get to determine the export control rating of your product by yourself (supported by your expert instructor).


Dates (Click To Book)


U.S. Export Controls

This course focuses on U.S. Export Controls, the EAR and ITAR.  Discover how an item can be subject to the EAR or ITAR, how to verify items against the CCL or the USML, how to determine licence requirements and licence exceptions, how to make a licence application, check Export Controls specific restrictive lists and more. We cover

  • The enforcement authority of the Bureau of Industry and Security (BIS) extends overseas.

  • Key US law on export restrictions and importance for non-US firms.

  • Concepts and definitions related to dual-use products.

  • the many categories of EAR bans for non-US companies.

  • The many export classifications and categories, including dual use.

  • The Commerce Control List: An Introduction (CCL).

  • the primary dangers associated with doing business with US companies.

  • Fines and penalties.

  • Vigilance and warning signs.

  • How to create an export compliance programme (ECP) that works?

  • How BIS licences are applied for.


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Special feature: A close look at the extraterritorial application of U.S. Export Controls De Minimis, Foreign Direct Product Rule, Second Incorporation Principle and more

Dates (Click To Book)



What if I have a question regarding these updates


We invite you to use the chat function available on www.customsmanager.org to ask any questions related to this update. Our skilled team of export control and sanctions managers will be happy to provide you with the information you need within 24 hours.

Sources


EU

  • Official Journal of the EU

  • DG TRADE Website

  • Social Media (LinkedIn, Twitter, etc).

  • Information on the National Export Control & Sanctions Website of Member States

  • Social Media Postings


U.S.

  • Bureau of Industry and Security (BIS)

  • Department of Commerce

  • Office of Foreign Asset Control (OFAC)

  • Social Media (LinkedIn, Twitter, etc).


UK

  • Information on gov.uk

  • Information on legislation.gov.uk

  • Department of Business and Trade

  • Social Media (LinkedIn, Twitter, etc).


Other

  • United Nations (Sanctions)

  • Social Media (LinkedIn, Twitter, etc).



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