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The Export Controls & Sanction Manager - Edition 5

Edition 5 - 2024 - Week 3 of your blog-style magazine on export controls & sanctions.

The period covered 01.02.2024 - 07.02.02.2024.



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A word from the editor


Finally, we had the time to sit down and work through the new EU Security Package.It should help the EU prepare for economic security threats in light of rising geopolitical tensions and rapid technological advancements. Our full briefing is free for anyone to read, see below.


Also read about the export control case fo the four Chinese citizens trying to send U.S.-origin electronic components to Iran and Iranian military affiliates. The consquences of illegal exprots are real and series due dilligence efforts must be undertaken by any exporter!


As regards sanctions, a lot has happened (see below) including the first designations of the EU under the Guatemala regime. In particular, I would like to invite you to our free webinar on the 23rd of February 2024 on EU & UK Sanctions against Russia - on the day before the dreadful invasion began, two years ago. It's free to attend. See below.


Have a captivating lecture! Any questions? Any feedback? Please don't hesitate to reach out to us at info@customsmanager.org via email.


See you live online, Friday.


Arne



Content



U.S. Export Controls

EU Export Controls

UK Export Controls


Sanctions Updates

EU Sanctions

UK Sanctions

U.S. Sanctions




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FREE WEBINAR - Two Years Of War In Europe: EU and UK Sanctions Against Russia in FOCUS



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Weekly Wrap Up

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Are you aware of the latest changes in customs and export controls? Join us for our new weekly online call, where you can stay ahead of the game. After the call, we offer an exclusive learning opportunity that covers crucial customs and global trade subjects in our weekly Lunch and Learn. Don't let this opportunity pass you by - registration is now OPEN!

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Lunch n' Learn


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As a paid subscriber, you can access an exclusive 30-minute "Lunch 'n Learn" session every week for free, saving you 50 GBP (regular price for non-premium paid plan subscribers). This is a live training session regarding customs and/or export controls/sanctions and the agenda can be determined by the audience (but we do propose an agenda below). During this session, we will explore a specific topic in more depth every week. Find out more

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Due Diligence & AML


No Update Noted (What does this mean?)

Export Controls Updates

To make sure you never miss an export control update, bookmark https://www.customsmanager.info/all-news/categories/export-controls


⇒ EU Export Controls


The EU’s new Economic Security Package: Our Briefing

The EU is preparing for its upcoming security challenges with the help of its new Economic Security Package. In light of escalating geopolitical tensions and rapid technological advancements, the EU's new Economic Security Strategy, which was adopted in June 2023, attempts to reduce threats to the EU's economic security. Read our Briefing (free for all)



⇒ UK Export Controls


No Update Noted (What does this mean?)


⇒ U.S Export Controls


BIS Enhances Voluntary Self-Disclosure Process

The Bureau of Industry and Security (“BIS”) Office of Export Enforcement (“OEE”) announced several Voluntary Self-Disclosure (VSD) process updates on January 16, 2024, to improve efficiency and effectiveness, facilitate disclosure, and encourage cooperation.


Read more...



Illegal exports of U.S.-origin electronic components to Iran and Iranian military affiliates

Four Chinese nationals have been indicted in the District of Columbia for illegally exporting U.S.-origin electronic components to Iran and Iranian military affiliates. The defendants, ... read on



State/DDTC Updates ITAR § 126.4 FAQ

(Source: State/DDTC, 6 Feb 2024)

Q: When using ITAR § 126.4, whose responsibility is it to receive and keep the end-user certification, where applicable? Is this the U.S. Government's, the exporter's, somehow decided between the two, or is this process exempt from that requirement?


A: ... read here


State/DDTC Updates CJ Determination FAQ

(Source: State/DDTC, 2 Feb 2024)

Q. We have a Commodity Jurisdiction (CJ) determination that our product was not subject to the International Traffic in Arms Regulations (ITAR) and was thus subject to the EAR. The USML category related to the product has been revised pursuant to Export Control Reform. Is the CJ determination still valid?


A: .... Read here

Sanctions Updates

We highlight the most important developments in the realm of EU, UK and U.S sanctions in our weekly report. Please do not hesitate to get in touch with any member of our Sanctions team mentioned above if you need any clarification about any of the developments listed below. For the collection of all articles we have written on this topic here https://www.customsmanager.info/all-news/categories/sanctions


Analyzing the Impact of Russia Sanctions on Contracts and Designated Persons: A Closer Look at the Rio Tinto Case

The Australian Federal Court has determined that Rio Tinto correctly interpreted the international sanctions against Russia in 2022 when it declined to cooperate with the refinery's minority shareholder in Queensland. Read about the case here.



⇒ EU Sanctions Updates


Sanctions Regulations (EU) 833/2014 and 269/2014 were updated d after the twelfth set of measures and apply to occupied areas of Ukraine and Russia. Reading these in a consolidated way allowed for important assistance to facilitate your search for sanctions. The "Russia Sanctions Regulations" have been consolidated by the European Commission, and this includes the updated annexes and measures related to the 12th set of sanctions.



EU names officials from Guatemala's government and judiciary

The following five people have been sanctioned by the EU for actions that threaten Guatemala's democracy, rule of law, or orderly handover of power:


⇒ UK Sanctions Updates


The UK Court of Appeal issues an anti-suit injunction to halt Russian actions in a sanctions case.

The UK Court of Appeal issues an anti-suit injunction to halt Russian actions in a sanctions case. Accepting UniCredit's appeal, the Court of Appeal granted an anti-suit injunction to halt RCA's lawsuit against UniCredit in Russia. The main point of contention is that UniCredit claims that EU sanctions against Russia prevented it from fulfilling its obligation to pay RCA under the bonds it issued to the latter....read on


UK Russia Sanctions: 1 entry amended on the consolidated list

Oleg Alexandrovich Mashtalyar (Group ID: 15353) has been amended on the UK Sanctions List on GOV.UK. This list provides details of those designated expected made under the Sanctions Act. Here remains subject to an asset freeze and trust services sanctions. Details here


UK General Licences Updated

On 06 February 2024, general licences INT/2023/2711256 and INT/2022/2009156 have been extended and amended respectively.


INT/2023/2711256 - Syria Humanitarian Activity. OFSI has extended the duration of this licence by 6 months, which will now expire on 14th August 2024 at 11.59 pm.


OFSI has amended this licence as below:


New EU-UK Relationship report after the Russian Invasion of Ukraine - Our Summary

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The UK-EU relations have been impacted by Russia's invasion of Ukraine, with the UK, EU, and its Member States responding swiftly. The UK's post-Brexit independent sanctions regime has been effective, but divergence between regimes weakens their effectiveness. The UK should use sanctioned Russian assets for the reconstruction of Ukraine and work closely with international partners. The UK is the second largest supplier of military support for Ukraine, but challenges remain in sustaining this support in the medium and long term. The UK should ... read on



Independent Review of Terrorism Legislation


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The Independent Reviewer of Terrorism Legislation of the United Kingdom government conducted an analysis of the international financial sanctions regime against terrorism in the United Kingdom, and the results of that analysis were published in December 2023.

Synopsis: The UK's counterterrorism sanctions regime is dependent on ..read on.



A UK court rules that disclosing documents to an aircraft lessor is legal.

In Aercap Ireland Limited v AIG and others [2024] EWHC 144 (Comm), the UK High Court considered whether disclosing reinsurance documents from the reinsurance broker, a third party in the litigation between lessors and insureds over aircraft and engines not returned by Russian lessees, would violate UK sanctions because some insurers were Russian.

Butcher J ruled it would not violate Russia sanctions (Reg 28-29A).




⇒ U.S. Sanctions Updates


Issuance of Venezuela-related Frequently Asked Questions

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending FAQ 629 and is publishing an updated document, "Frequently Asked Questions Related to the Suspension of Certain U.S. Sanctions with Respect to Venezuela on October 18, 2023." 

FAQ 629: EO 13850 authorizes the imposition of sanctions on persons operating in Venezuela’s gold sector.  For purposes of this E.O., how will OFAC target those who “operate in the gold sector of the Venezuela economy or any other sector of the Venezuela economy as may be determined by the Secretary of the Treasury in consultation with the Secretary of State”?

Answer – ...read on


Actors Liable for Malicious Cyber Activities on Critical Infrastructure Face Sanctions from the Treasury

Six members of the Iranian Islamic Revolutionary Guard Corps Cyber-Electronic Command (IRGC-CEC), an Iranian government agency in charge of a number of malevolent cyberattacks against vital infrastructure in the US and other nations, were sanctioned by the Department of Treasury's Office of Foreign Assets Control (OFAC). These were:



Iran's Ballistic Missile and UAV TPP Sanctioned by Treasury

OFAC sanctioned a major procurement network of suppliers of materials and sensitive technologies for Iran's ballistic missile and UAV projects, including ...read on


Executive Order Imposing Specific Sanctions on Individuals Threatening West Bank Peace, Security, and Stability

A national emergency was declared by President Biden on February 1, 2024, in an effort to address West Bank challenges including property devastation, forced evictions, and acts of extremist settlement violence. US foreign policy objectives, such as achieving a two-state settlement and ensuring equal security, prosperity, and freedom for both Israelis and Palestinians, were compromised by the actions. ...details . Read the Order here.


The Treasury's FinCEN warned against financing Israeli extreme settler violence against West Bank Palestinians.

A red flag advice helps U.S. financial institutions identify and report questionable conduct that finances violence. Some nonprofit organisations (NPOs) may allow donations to support West Bank violence, however FinCEN cautions that genuine charities should have access to banking services and may move money transparently. FinCEN urges banks to use risk-based Customer Due Diligence to assess charities and other non-profit customers' risk. No customer category—including NGOs and NPOs—increases illicit activity risk. Since no one red flag signals unlawful or suspect conduct, U.S. financial institutions should evaluate all the facts and circumstances before evaluating whether a transaction is suspicious or related to Israeli violent extremist organisations or activities. Finally, Treasury's Office of Foreign Assets Control (OFAC) is alerting the public that under the Executive Order of February 1, 2024, “Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank,” the U.S. can impose sanctions on foreigners who are responsible for or complicit in such crimes to punish them and defend the financial system. Read the press release and full details


Release of the Price Cap Coalition Notification

To limit Russian revenues and maintain global oil flows, the G7+ Coalition introduced the Oil Price Cap (OPC) in December 2022. To improve OPC compliance, the Price Cap Coalition must avoid circumvention and misinterpretation. Forged documents, opaque shipping, third-country supply chain intermediaries, flagging, the "shadow" fleet, and voyage irregularities are OPC evasion. This alert encourages industry stakeholders to follow previous guidance to improve compliance and reduce circumvention and evasion.

Worldwide Oil Price Cap protects oil and gas industry integrity. Attestations, transaction and shipping documentation, and shipping and ancillary costs must be accurate. Coalition services can hide Russian oil and product prices with forged documents to support non-price cap transactions. Under price cap compliance, coalition service providers must attest and supply chain participants must share itemised ancillary costs. Industry stakeholders should conduct due diligence, implement sanctions compliance programmes, and manage risks through KYC to prevent OPC evasion. Russian flagging and reflagging may conceal ownership.

In the "shadow" fleet, older vessels owned anonymously or with opaque corporate structures trade only sanctioned oil or oil products. Russia has transported oil and oil products on these vessels to avoid sanctions, causing environmental damage, safety risks, and high costs. Industry stakeholders should register vessels, maintain maritime insurance, and classify counterparties with the IACS to stop shadow fleet illegal operations. Look for voyage age irregularities, AIS manipulation, and ship-to-ship transfers that hide cargo origin, type, and destination. To comply with international law and prevent crime, stakeholders should disclose voyage and shipment details.

Industry should monitor vessels and regions with voyage irregularities, AIS manipulation and spoofing, and illegal STS transfers. This should include legitimate voyage irregularities like high-risk vessel security management. Transit and transshipment routes and destinations that deviate from business practices for unknown reasons should be examined by stakeholders. They should know STS transfer locations associated with deception or evasion, especially when combined with AIS manipulation and voyage history. SOLAS allows port authorities to investigate AIS history if a vessel cannot account for it. If a partner vessel has previously engaged in an STS operation with a vessel carrying Russian oil or oil products above the price cap or other sanctioned cargo, a legitimate operation may still be sanctionable.


British national found guilty of trying to sell US technology to Iran and sentenced to prison

A British national was jailed for trying to sell US technology to Iran. British national Sabre Fakih was found guilty of breaking the Iranian Transactions and Sanctions Regulations and the International Emergency Economic Powers Act (IEEPA) and was given an 18-month prison sentence. In his plea deal, Sabre Fakih admitted that he had planned to export an Industrial Microwave System (IMS) and counter-drone system from the United States to Iran, without first obtaining the necessary OFAC licence, along with a Canadian, an individual from the United Arab Emirates, and an Iranian. Access details of the case


Sudan Sanctions Updated

Due to their involvement in jeopardising Sudan's peace, security, and stability, OFAC has designated three entities: Alkhaleej Bank Co Ltd, under RSF control and a vital component of the organization's efforts to finance its operations; Al-Fakher Advanced Works Co Ltd, under RSF control and founded by RSF senior leadership as a holding company to manage RSF's gold export business; and Zadna International Co for Development Ltd, purportedly under RSF control.


Treasury Sanctions the Hizballah Financial Network and the Iranian IRGC-QF

OFAC imposed sanctions on three organisations and one person in Lebanon and Turkey for giving vital financial assistance to the financial network of Hizballah and the Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). These organisations have sold Iranian commodities, including to the Syrian government, for hundreds of millions of dollars. These sales of commodities serve as a major source of funding for the terrorist activities of the IRGC-QF, Hizballah, and other terrorist groups operating in the region.


Treasury Sanctions Burmese Military Companies and Cronies Three Years After January 31, 2024 Military Takeover

On the three-year anniversary of Burma's military coup, the OFAC is designating two entities closely associated with the regime and four cronies under Executive Order (E.O.) 14014. OFAC coordinated this sanctions action to include individuals and entities Canada designated on October 31, 2023.


Burma's military overthrew its democratically elected government and civilian leaders on February 1, 2021. For three years, the military has used terror and violence to oppress the Burmese people and prevent them from freely electing their leaders. Despite international pressure, Burma's military regime continues to bomb civilian areas with military aircraft. Burma's military relies on a large network of organisations and individuals for material and financial support to carry out these attacks.


Upcoming Export Control and Sanctions Training


Learn the essentials of 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 help prevent expensive export control and sanctions fines. It imparts essential knowledge that personnel responsible for export controls and sanctions compliance need to grasp.


Sanctions

This course develops the competencies that professionals need 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, how to set up an effective restricted party screening programme, how to identify economic trade sanctions and how your products may be affected by it. We will determine due diligence requirements, and how you can identify attempts for circumvention. We will discuss how to apply 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 that 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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