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, Sven Goor, and Alex Witt.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Announces Sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act; The Daily Bugle; Monday, 5 August 2019, Item #4;
- EU Commission Publishes Recommendation on Internal Compliance Programmes for Dual-Use Trade Controls; The Daily Bugle; Monday, 5 August 2019, Item #5;
- Commerce/BIS Debars Three Individuals for Violation of AECA and IEEPA; The Daily Bugle; Tuesday, 6 August 2019, Item #2;
- Treasury/OFAC Reaches Settlement Agreement with PACCAR Inc.; The Daily Bugle; Tuesday, 6 August 2019, Item #5;
- Treasury/OFAC Amends Iranian Financial Sanctions Regulations and Iranian Human Rights Abuse Sanctions Regulations; The Daily Bugle; Wednesday, 7 August 2019, Item #2;
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1. Treasury/OFAC Announces Sanctions under the Chemical and Biological Weapons Control and Warfare Elimination Act
(Source: Treasury/OFAC, 3 August 2019.)
The U.S. Department of the Treasury announced today that it is implementing two sanctions on the Russian Federation as part of measures imposed by the U.S. government pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (“CBW Act”), in response to Russia’s use of the “Novichok” nerve agent in Salisbury, United Kingdom (UK) in March 2018. This action follows the Department of State’s determination that the Government of the Russian Federation failed to comply with the conditions described in the CBW Act. Treasury is imposing a prohibition related to certain U.S. bank loans and will oppose multilateral development bank assistance to the Russian Federation.
To implement the sanction related to U.S. bank loans, Treasury’s Office of Foreign Assets Control (OFAC) is issuing a Russia-related Directive (the “CBW Act Directive”) under the Executive Order (E.O.) of August 1, 2019. The CBW ActDirective prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian sovereign and also prohibits U.S. banks from lending non-ruble denominated funds to the Russian sovereign. The CBW Act Directive will become effective on August 26, 2019, following a Congressional notification period required by the CBW Act. OFAC is publishing a list of Frequently Asked Questions (FAQs)to provide guidance to the public on the CBW Act Directive.
Treasury will also ensure that the U.S. Government’s existing policy of opposing multilateral development bank assistance to the Russian Federation remains permanently in place until Russia complies with the requirements of the CBW Act.
View the CBW Act Directive, FAQs, and information on today’s action.
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2. EU Commission Publishes Recommendation on Internal Compliance Programmes for Dual-Use Trade Controls
(Source: EUR LEx, 30 July 2019.)
*Commission Recommendation
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3. Commerce/BIS Debars Three Individuals for Violation of AECA and IEEPA
(Source: Commerce/BIS, 6 August 2019.)
* Respondent: Juan Jesus De La Rosa
* Charges: Violation of Section 38 of the Arms Export Control Act
* Penalty: 27 months in prison, 3 years of supervised release and an assessment of $100.
* Debarred: 10 years
* Date of Order: 5 August 2019
* Respondent: Michael Shapovalov a/k/a Mikhail Shapovalov
* Charges: Violation of Section 38 of the Arms Export Control Act
* Penalty: 34 months in prison, 3 years of supervised release and an assessment of $100.
* Debarred: 7 years
* Date of Order: 5 August 2019
* Respondent: Si Chen a/k/a Cathy Chen a/k/a Celia Chen a/k/a Cecelia Chen a/k/a Chunping Ji of Pomona, CA
* Charges: Violation of the International Emergency Economic Powers Act
* Penalty: 46 months in prison, 3 years of supervised release and a special assessment of $300.
* Debarred: 10 years
* Date of Order: 5 August 2019
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4. Treasury/OFAC Reaches Settlement Agreement with PACCAR Inc.
(Source: Treasury/OFAC, 6 August 2019.)
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $1,709,325 settlement with PACCAR Inc (“PACCAR”). PACCAR, a company headquartered in Bellevue, Washington, has agreed to settle its potential civil liability for 63 apparent violations of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR) by DAF Trucks N.V. (“DAF”), a wholly owned subsidiary of PACCAR, headquartered in Eindhoven, the Netherlands. Specifically, between the approximate dates of October 2013 and February 2015, DAF sold or supplied 63 trucks to customers in Europe that it knew or had reason to know were ultimately intended for buyers in Iran. These transactions appear to have violated § 560.215 of the ITSR. OFAC determined that PACCAR voluntarily disclosed the apparent violations, and that the apparent violations constitute a non-egregious case.
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5. Treasury/OFAC Amends Iranian Financial Sanctions Regulations and Iranian Human Rights Abuse Sanctions Regulations
(Source: Federal Register, 7 August 2019.) [Excerpts.]
84 FR 38545: Final Rule; Iranian Financial Sanctions Regulations and Iranian Human Rights Abuses Sanctions Regulations
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final Rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Iranian Financial Sanctions Regulations, changing the heading of the Iranian Human Rights Abuses Sanctions Regulations to the Iranian Sector and Human Rights Abuses Sanctions Regulations, and amending the renamed Iranian Sector and Human Rights Abuses Sanctions Regulations to implement Executive Order 13871 of May 8, 2019 (‘‘Imposing Sanctions With Respect to the Iron, Steel, Aluminum and Copper Sectors of Iran’’).
* DATES: Effective Date: August 7, 2019.
* FOR FURTHER INFORMATION CONTACT:
* SUPPLEMENTARY INFORMATION: … Amendments to the IFSR
OFAC is redesignating the existing § 561.205 as § 561.220 and adding a new § 561.205 to subpart B of the IFSR to implement the correspondent account or payable-through account sanctions in section 2 of E.O. 13871. Additionally, in subpart C, which defines key terms used throughout the IFSR, OFAC is adding new §§ 561.331 through 561.339 to provide definitions of aluminum, aluminum products, aluminum sector of Iran, copper, copper products, copper sector of Iran, iron, iron products, steel, steel products, iron sector of Iran, and steel sector of Iran. OFAC also is making conforming edits to § 561.301, relating to the effective date of applicable prohibitions, § 561.403, relating to facilitation, § 561.404, relating to determinations of significance, § 561.504, relating to an authorization for transactions related to closing a correspondent or payable-through account, and § 561.802, relating to the delegation of authority by the Secretary of the Treasury. …
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