Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 6,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Alexander P. Bosch, Vincent J.A. Goossen, and Alex Witt.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Announces Settlement with Standard Chartered Bank for Apparent Violations of Multiple Sanctions Programs; The Daily Bugle; Tuesday, 9 Apr 2019, Item #7;
- Commerce/BIS Amends EAR by Updating the Unverified List (15 CFR Part 775); The Daily Bugle; Thursday, 11 Apr 2019, Item #1;
- Treasury/OFAC Announces Settlement Agreement with Acteon Group, Ltd., 2H Offshore Engineering Ltd., KKR & Co. Inc., and Seatronics Ltd.; The Daily Bugle; Thursday, 11 Apr 2019, Item #5;
- EU Commission Releases Detailed Information on Requirements for EU Goods Exported to The UK in Case of a Hard Brexit; The Daily Bugle; Friday, 12 Apr 2019, Item #7;
- UK/OFSI Publishes Three Guidance Documents Concerning Sanctions Against the Republic of Guinea-Bissau, South Sudan, and Counter-terrorism; The Daily Bugle; Friday, 12 Apr 2019, Item #9;
1. Treasury/OFACAnnounces Settlement with Standard Chartered Bank for Apparent Violations of Multiple Sanctions Programs
(Source:Treasury/OFAC, 9 Apr 2019.)
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $639,023,750 settlement with Standard Chartered Bank (“SCB” or the “Bank”), a financial institution headquartered in the United Kingdom. The bank has agreed to settle its potential civil liability for apparent violations of the now-repealed Burmese Sanctions Regulations (BSR); the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR); the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR); the now-repealed Sudanese Sanctions Regulations; and the Syrian Sanctions Regulations, 31 C.F.R. Part 542 (SySR), or Executive Order 13582 of August 17, 2011, “Blocking Property of the Government of Syria and Prohibiting Certain Transactions With Respect to Syria” (E.O. 13582).
From June 2009 until June 2014, SCB processed 9,335 transactions totaling $437,553,380 that were processed to or through the United States. All of these transactions involved persons or countries subject to comprehensive sanctions programs administered by OFAC. The majority of the conduct concerns Iran-related accounts maintained by SCB’s Dubai, UAE branches (“SCB Dubai”), including accounts at SCB Dubai held for a number of general trading companies, and a petrochemical company. SCB Dubai processed USD transactions to or through SCB’s branch office in New York (“SCB NY”) or other U.S. financial institutions on behalf of customers that sent payment instructions to SCB Dubai while physically located or ordinarily resident in Iran. OFAC determined that the Bank did not voluntarily self-disclose the apparent violations, and the apparent violations constitute an egregious case.
Separately, the bank has agreed to settle its potential civil liability for apparent violations of the Zimbabwe Sanctions Regulations (ZSR). The bank has agreed to remit $18,016,283. All of the transactions giving rise to the Zimbabwe-Related Apparent Violations involved persons identified on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”) or parties that were owned 50 percent or more, directly or indirectly, by persons on the SDN List at the time the transactions occurred. The designated and/or blocked persons maintained account relationships with SCB’s affiliate in Zimbabwe (“SCBZ”), and engaged in funds transfer or debit/credit card transactions whose net settlement transfers were sent to, and processed by SCB NY or other U.S. financial institutions. SCB NY processed 1,795 transactions totaling $76,795,414, for or on behalf, or that otherwise contained a property interest, of those sanctioned entities.
OFAC determined that SCB voluntarily self-disclosed the Zimbabwe-Related Apparent Violations and that the Zimbabwe-Related Apparent Violations constitute a non-egregious case.
2. Commerce/BIS Amends EAR by Updating the Unverified List (15 CFR Part 775)
(Source:Federal Register, 11 Apr 2019.) [Excerpts.]
84 FR 14608-14614: Revisions to the Unverified List (UVL)
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding fifty (50) persons to the Unverified List (“UVL”), removing ten (10) persons, and adding an additional address for one (1) person currently listed on the UVL. The fifty persons are added to the UVL on the basis that BIS could not verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the U.S. Government’s control. BIS is adding a new address for one person as BIS has determined that this person is receiving exports from the United States at an additional address.
* DATES: This rule is effective: April 11, 2019.
* FOR FURTHER INFORMATION CONTACT: Kevin Kurland, Director, Office of Enforcement Analysis, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-4255 or by email at UVLRequest@bis.doc.gov.
* SUPPLEMENTARY INFORMATION: …This rule adds fifty (50) persons to the UVL by amending Supplement No. 6 to Part 744 of the EAR to include their names and addresses. BIS adds these persons in accordance with the criteria for revising the UVL set forth in Sec. 744.15(c) of the EAR. The new entries consist of thirty-seven persons located in China, six in Hong Kong, four in the United Arab Emirates, two in Malaysia, and one in Indonesia. Each listing is grouped within the UVL by country with each party’s name(s) listed in alphabetical order under the country; each entry includes available alias(es) and address(es), as well as the Federal Register citation and the date the person was added to the UVL. The UVL is included in the Consolidated Screening List, available at www.export.gov.
This rule also adds one additional address for one person currently listed on the UVL, Ling Ao Electronic Technology Co. Ltd, a.k.a. Voyage Technology (HK) Co., Ltd., a.k.a. Xuan Qi Technology Co. Ltd., as BIS has determined that this person is receiving exports from the United States at an additional address. Further, this rule fixes minor typographical errors in two of the existing addresses for the same company.
Finally, this rule removes ten persons from the UVL. BIS is removing these persons pursuant to information received by BIS pursuant to Sec. 744.15(d) of the EAR and further review conducted by BIS. This final rule implements the decision to remove the following three persons located in China, one person located in Finland, five persons located in Russia, and one person located in the United Arab Emirates from the UVL:
(1) Jiujiang Jinxin Nonferrous Metals Co., Ltd., Xunyang Chem. Bldg., Materials Factory, Xunyang District, Jiujiang City, China,
(2) Liupanshui Normal University, 19 Minhu Road, Zhongshan District, Liupanshui, Guizhou, 553004, China, and
(3) Yantai Salvage Bureau, No. 100 Zhifudao East Road, Zhifu District, Yantai, Shandong, 264012, China
(1) Net Logistics JVM OY, a.k.a. Net Logistic JVM OY, Eskolantie 1, Helsinki, Finland, 00720 and Merituulentie 486, Port Mussalo, Kotka, Finland 48310
(1) Eltech Ltd., 3A, pl. Konstitutsii, Saint Petersburg 196247, Russia,
(2) MT Systems, Kalinina Street 13, Saint Petersburg 198099, Russia,
(3) Romona Inc., Prospekt Mira 426, Yuzhno-Sakhalinsk 693004, Russia,
(4) Sakhalin Energy Investment Company Ltd., Dzerzhinskogo Street 35, Yuzhno-Sakhalinsk 693020, Russia, and
(5) SIC Dipaul, Bolshaya Monetnaya Street 16, Saint Petersburg 197101, Russia, and 5B, Rentgena ul., Saint Petersburg 197101, Russia
United Arab Emirates
(1) GenX Middle East FZE, a.k.a. GenX Systems LLC, #510-511 Le Solarium Building, Dubai Silicon Oasis, Dubai, UAE, and P.O. Box 121225, Office M07, Al Zahra, Khaleed Bin Al Waleed Road, Bur Dubai, Dubai, UAE. …
Dated: April 5, 2019.
Nazak Nikakhtar, Assistant Secretary for Industry & Analysis, Performing the Non-Exclusive Duties of the Under Secretary for Industry and Security.
3. Treasury/OFAC Announces Settlement Agreement with Acteon Group, Ltd., 2H Offshore Engineering Ltd., KKR & Co. Inc., and Seatronics Ltd.
(Source:Treasury/OFAC, 11 Apr 2019.)
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $227,500 settlement with Acteon Group Ltd. (“Acteon”), and Acteon’s subsidiary 2H Offshore Engineering Ltd. (“2H Offshore”) that has two Malaysian affiliates: 2H Offshore Engineering Sdn Bhd and 2H Offshore Engineering (Asia Pacific) Sdn Bhd (collectively “2H KL”). Acteon, a subsea service provider in the oil and gas industry based in the United Kingdom (UK), and 2H Offshore, an engineering contractor based in the UK that specializes in services used in offshore oil and gas drilling production, have agreed to settle their potential civil liability for seven apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR). Specifically, between on or about May 18, 2011 and on or about October 18, 2012, 2H KL performed engineering design analyses for oil well drilling projects in Cuban territorial waters, and sent its engineers to Cuba to conduct workshops on these analyses. OFAC determined that 2H Offshore voluntarily self-disclosed the apparent violations, and that these apparent violations constitute an egregious case.
Separately, OFAC announced a $213,866 settlement with KKR & Co. Inc. (“KKR”), Acteon, and Acteon’s subsidiaries Seatronics Ltd., Seatronics, Inc., and Seatronics Ptd. Ltd. (collectively “Seatronics”). Acteon has agreed to settle: (1) it and Seatronics’, a geophysical services company based in the UK, potential civil liability for 13 apparent violations of the CACR; and (2) KKR’s, a global investment firm based in New York City, potential civil liability for three apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). Specifically, between on or about August 12, 2010 and on or about March 16, 2012, Acteon appears to have violated § 515.201 of the CACR when Seatronics rented or sold equipment for oil exploration projects in Cuban territorial waters, and sent company engineers to service equipment on vessels operating in Cuban territorial waters. In addition, between on or about September 10, 2014 and on or about November 11, 2014, Seatronics appears to have violated §§ 560.215 and § 560.204 of the ITSR when Seatronics Ltd.’s Abu Dhabi, United Arab Emirates branch rented or sold equipment to customers who appear to have embarked the equipment on vessels that operated in Iranian territorial waters. OFAC determined that Acteon voluntarily self-disclosed the apparent violations, and that these apparent violations constitute a non-egregious case.
For more information, please see this web notice.
4. EU Commission Releases Detailed Information on Requirements for EU Goods Exported to The UK in Case of a Hard Brexit
(Source:European Commission, 8 Apr 2019.)
The European Commission has included in its Market Access Database detailed information on the rules that the UK would apply on its imports from the EU in the event of a hard Brexit. It is based on information made publicly available by the United Kingdom authorities.
This is a part of the Commission’s efforts to help industry be prepared in case the United Kingdom leaves the European Union without a negotiated deal.
The Market Access Database provides detailed information on duties and taxes that apply to exports to a given country, as well as on import procedures and formalities that must be accomplished for customs clearance. The database contains information for 121 countries, and as of today, it also provides the same level of information for exports to the UK as for any other EU trade partners such as the US or China.
Access the Market Access Database here.
5. UK/OFSI Publishes Three Guidance Documents Concerning Sanctions Against the Republic of Guinea-Bissau, South Sudan, and Counter-terrorism
(Source:UK OFSI, 11 Apr 2019.)
The UK Office of Financial Sanctions Implementation (OFSI) provides guidance on the UK’s sanctions regime on the Republic of Guinea-Bissau, South Sudan, and guidance of use to any organization or individual working in a region where terrorist organizations operate.