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The Daily Bugle Monthly Highlights: April
Every month we post the highlights of FCC’s Export/Import Daily Update (“The Daily Bugle”). The Daily Bugle is sent out every business day to approximately 10,000 readers, who keep up to date with changes in defense and high-tech trade laws and regulations. It is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III and Elina Tsapouri.
We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of European Union, Australia, Canada, U.K., and other countries and international organizations. Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items. To subscribe, click here.
Last month’s highlights of The Daily Bugle included in this edition are:
- UK Export Controls: “UK Exporters Fined for Unlicensed Strategic Exports”; Wednesday, 6 Apr 2022; Item #7
- Commerce/BIS Amends the EAR by Adding Entities to the Entity List; Thursday, 7 Apr 2022; Item #1
- Justice: “Russian Oligarch Charged with Violating U.S. Sanctions”; Thursday, 7 Apr 2022; Item #5
- DHS/CBP: “FDA publishes YouTube video ‘Importing FDA-Regulated Products: The Import Process’”; Friday, 8 Apr 2022; Item #6
- Commerce/BIS Expands Sanctions against Russia and Belarus; Thursday, 14 Apr 2022; Item #1
- Commerce/BIS Takes Enforcement Actions Against Three Airlines Violating U.S. Export Controls; Friday, 15 Apr 2022; Item #3
- State/DDTC Publishes End-Use Monitoring Report for FY 2021; Friday, 15 Apr 2022; Item #6
- Commerce/Census: “Exports Between the United States and Puerto Rico: When to File Electronic Export Information for Electronic Goods and Vehicles”; Tuesday, 19 Mar 2022; Item #4
- Treasury/OFAC: “Russia-Related Designations and Designation Update; Issuance of Russia-related General Licenses”; Thursday, 21 Apr 2022; Item #5
- UK Export Controls: “Updated List of Dual-Use Controlled Items”; Wednesday, 27 Apr 2022; Item #6
UK Export Controls: “UK Exporters Fined for Unlicensed Strategic Exports”
Notice to exporters 2022/12: UK exporters fined for unlicensed strategic exports. The notices to exporters collection brings together all published notices.
This notice sets out compound penalties related to unlicensed exports of dual-use and military goods, and related activity controlled by the Export Control Order 2008.
Commerce/BIS Amends the EAR by Adding Entities to the Entity List
(Source: Today’s Federal Register, 87 FR 203295, 7 Apr 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: In response to the Russian Federation’s (Russia’s) further invasion of Ukraine on February 24, 2022, the Department of Commerce is amending the Export Administration Regulations (EAR) by adding 120 entities under 120 entries to the Entity List. These 120 entities have been determined by the U.S. Government to be acting contrary to the national security interests or foreign policy of the United States and will be listed on the Entity List under the destinations of Belarus and Russia.
* DATES: This rule is effective April 1, 2022.
Justice: “Russian Oligarch Charged with Violating U.S. Sanctions”
A Russian national is charged with violating U.S. sanctions arising from the 2014 Russian undermining of democratic processes and institutions in Ukraine.
According to the indictment, which was unsealed today in the Southern District of New York, Konstantin Malofeyev, 47, of Russia, is charged with conspiracy to violate U.S. sanctions and violations of U.S. sanctions in connection with his hiring of an American citizen, Jack Hanick, to work for him in operating television networks in Russia and Greece and attempting to acquire a television network in Bulgaria. As alleged, Malofeyev also conspired with Hanick and others to illegally transfer a $10 million investment that Malofeyev made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Malofeyev’s assets from being transferred. Along with the indictment, the United States issued a seizure warrant for Malofeyev’s U.S. investment. Malofeyev remains at large and is believed to be in Russia. …
According to court documents, in 2014, the President issued Executive Order 13660, which declared a national emergency with respect to the situation in Ukraine. To address this national emergency, the President blocked all property and interest in property that came within the United States or the possession or control of any U.S. person, of individuals determined by the Secretary of the Treasury to be responsible for or complicit in actions or policies that threatened the peace, security, stability, sovereignty or territorial integrity of Ukraine, or who materially assist, sponsor or provide financial, material or technological support for, or goods and services to, individuals or entities engaging in such activities.
Executive Order 13660, along with certain regulations issued pursuant to it (the Ukraine-Related Sanctions Regulations) prohibits, among other things, making or receiving any funds, goods or services by, to, from or for the benefit of any person whose property and interests in property are blocked.
On Dec. 19, 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Konstantin Malofeyev as a Specially Designated National (SDN) pursuant to Executive Order 13660. OFAC’s designation of Malofeyev explained that he was one of the main sources of financing for Russians promoting separatism in Crimea, and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.
As alleged in the indictment, Malofeyev hired a U.S. citizen named Jack Hanick in 2013 to work on a new Russian cable television news network (the Russian TV Network) that Malofeyev was creating. Malofeyev negotiated directly with Hanick regarding Hanick’s salary, payment for Hanick’s housing in Moscow, and Hanick’s Russian work visa, and Malofeyev paid Hanick through two separate Russian entities through the end of 2018.
After OFAC designated Malofeyev as a SDN in December 2014, Malofeyev continued to employ Hanick on the Russian TV Network, in violation of the Ukraine-Related Sanctions Regulations. Malofeyev also dispatched Hanick to work on a project to establish and run a Greek television network and on efforts to acquire a Bulgarian television network. At Malofeyev’s direction, Hanick traveled to Greece and to Bulgaria on multiple occasions in 2015 and 2016 to work on these initiatives and reported directly back to Malofeyev on his work. For instance, in November 2015, Hanick wrote to Malofeyev that the Greek television network would be an “opportunity to detail Russia’s point of view on Greek TV.” In connection with Malofeyev’s efforts to acquire the Bulgarian television network, Malofeyev instructed Hanick to take steps to conceal Malofeyev’s role in the acquisition by conducting the negotiations through a Greek associate of Malofeyev (the Greek Business Associate), so that it would appear the buyer was a Greek national rather than Malofeyev.
Malofeyev also employed Hanick to assist Malofeyev in transferring a $10 million investment in a Texas-based bank holding company (the Texas Bank) to the Greek Business Associate in violation of the Ukraine-Related Sanctions Regulations. In 2014, Malofeyev used a shell company to make the investment, and beginning in or about March 2015, Malofeyev began making plans to transfer ownership of the shell company to the Greek Business Associate as a means to transfer the investment in the Texas Bank. In or about May 2015, Malofeyev’s attorney drafted a Sale and Purchase Agreement that purported to transfer the shell company to the Greek Business Associate in exchange for one U.S. dollar.
In June 2015 Malofeyev had Hanick physically transport a copy of Malofeyev’s certificate of shares in the Texas Bank from Moscow to Athens to be given to the Greek Business Associate. Malofeyev signed the Sale and Purchase Agreement in June 2015, but the agreement was fraudulently backdated to July 2014 to make it appear that the transfer had taken place prior to the imposition of U.S. sanctions. Malofeyev’s attorney then falsely represented to the Texas Bank that the transfer had taken place in July 2014, even though Malofeyev and his attorney well knew that the transfer of the shell company was executed in June 2015.
Along with the unsealed indictment, a seizure warrant was issued in the Southern District of New York for Malofeyev’s Texas Bank investment, which had been converted by the Texas Bank in 2016 to cash held in a blocked U.S. bank account. The United States recovered those funds pursuant to the warrant and will seek forfeiture of those funds as property that constitutes or is derived from proceeds traceable to the commission of the offenses alleged in the indictment.
Each of the two sanctions charges in the indictment carry a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. …
DHS/CBP: “FDA publishes YouTube video ‘Importing FDA-Regulated Products: The Import Process’”
(Source: CBP, 7 Apr 2022)
CSMS #51536413 – The FDA has produced a public video outlining the general FDA import process for FDA-regulated products. This video was developed to fill a recognized gap between foreign suppliers and domestic importers/brokers on the details of the FDA admissibility process starting from declaration through the final admissibility decision. Prior to the creation of this video, information about the FDA import process was only available through public websites or occasional webinars, industry trainings, and individual communications (email). The video is published on the FDA YouTube channel: https://youtu.be/PwF-ki-oIDw
For more information about the FDA Import Process, please visit: www.fda.gov/imports. For general import policy or operation questions, contact FDAImportsInquiry@fda.hhs.gov. To monitor the real-time status of your shipment, submit entry documents, submit locations for examination, and/or obtain Notices of FDA Action electronically, please visit https://itacs.fda.gov.
Commerce/BIS Expands Sanctions against Russia and Belarus
(Source: 87 FR 22130, 14 Apr 2022) [Excerpts]
* AGENCY: Commerce, Industry and Security Bureau
* ACTION: Final Rules
* SUMMARY: In response to the Russian Federation’s (Russia) ongoing aggression in Ukraine following its further invasion of the country, as substantially enabled by Belarus, this rule expands license requirements for Russia and Belarus under the Export Administration Regulations (EAR) to all items on the Commerce Control List (CCL). It also removes license exception eligibility for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus.
* DATES: This rule is effective on April 8, 2022.
* SUPPLEMENTARY INFORMATION:
In response to Russia’s February 2022 further invasion of Ukraine and Belarus’s substantial enabling of this invasion by allowing it to proceed from Belarusian territory, the Bureau of Industry and Security (BIS) imposed extensive sanctions on Russia and Belarus by amending the Export Administration Regulations (15 CFR parts 730-774) (EAR). These sanctions reflected the U.S. Government’s position that Russia’s invasion of Ukraine, as substantially enabled by Belarus, flagrantly violated international law, was contrary to U.S. national security and foreign policy interests, and undermined global order, peace, and security, and therefore necessitated stringent and expansive sanctions. Since February 2022, BIS, in coordination with its allies and partners, has issued several rules that subject both countries to restrictions under the EAR. BIS has primarily targeted the Russian and Belarusian defense, aerospace, and maritime sectors with expanded export controls, including controls on the export from abroad of certain foreign-produced items that are subject to the EAR.
Stringent licensing restrictions under the EAR were initially imposed on Russia as part of the final rule, Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR), effective on February 24, 2022, and published March 3, 2022 (87 FR 12226). Among other restrictions, BIS implemented a new license requirement for Russia on items subject to the EAR and classified under any Export Control Classification Number (ECCN) in Categories 3 through 9 of the Commerce Control List, supp. no. 1 to part 774 of the EAR (CCL) as part of new § 746.8(a)(1) (Russia sanctions) in part 746 of the EAR (Embargoes and Other Special Controls). BIS extended this new license requirement to Belarus (see § 746.8 (Russia and Belarus sanctions)) as part of the final rule, Implementation of Sanctions Against Belarus Under the Export Administration Regulations (EAR), effective on March 2, 2022, and published March 8, 2022 (87 FR 13048) (Belarus rule).
This rule expands the license requirement that was previously imposed on Russia and Belarus to include items classified under any ECCN in Categories 0 through 2 of the CCL. Accordingly, the license requirement under § 746.8(a)(1) (Russia and Belarus sanctions) now applies to all items on the CCL. Additionally, consistent with this expanded license requirement, this rule revises the foreign “direct product” rule (FDP rule) in § 734.9(f) of the EAR that relates to both Russia and Belarus (the “Russia/Belarus FDP rule”) to apply to all items on the CCL. Therefore, foreign-produced items derived from ECCNs in Categories 0 through 9 of the CCL will now be subject to the EAR under the Russia/Belarus FDP rule as well as to the license requirement described in § 746.8(a)(2).
Additionally, as part of the U.S. Government’s response to Belarus’s actions in support of Russia’s aggressive conduct in Ukraine, this rule limits the availability of two paragraphs of License Exception Aircraft, vessels and spacecraft (AVS) (§ 740.15(a) and (b)) for certain Belarus-related aircraft. Specifically, paragraph (c) (License Exceptions) specifies certain license exceptions that apply to § 746.8(a)(1) and (2) for transactions involving Russia or Belarus, and this rule revises paragraph (c)(5) to preclude the availability of paragraphs (a) and (b) of License Exception AVS for any aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. Thus, as revised by this rule, paragraphs (a) and (b) of License Exception AVS are not available for aircraft registered in, owned, or controlled by, or under charter or lease by, Belarus or Russia, or by a Belarusian or Russian national. As a conforming change, this rule revises footnote 6 to the Commerce Country Chart (supplement no. 1 to part 738) to reflect the revised license requirements in § 746.8(a)(1). . . .
Commerce/BIS Takes Enforcement Actions Against Three Airlines Violating U.S. Export Controls
(Source: Commerce/BIS, 14 Apr 2022)
Bureau of Industry and Security (BIS) Assistant Secretary for Export Enforcement Matthew S. Axelrod issued orders on 7 April 2022 denying the export privileges of three Russian Airlines – Aeroflot, Azur Air, and UTair – due to ongoing export violations related to comprehensive export controls on Russia imposed by the Commerce Department.
These three Temporary Denial Orders (TDOs) terminate the right of these airlines to participate in transactions subject to the Export Administration Regulations (EAR), including exports and reexports from the United States. The TDOs are issued for 180-days and may be renewed.
“The Biden Administration has imposed historic sanctions on the Russia for the unwarranted aggression happening in Ukraine. With today’s temporary denial orders, the Department of Commerce takes another significant action to hold Putin and his enablers accountable for their inexcusable actions,” said Commerce Secretary Gina M. Raimondo. “We are cutting off not only their ability to access items from the United States but also reexports of U.S.-origin items from abroad. Any companies that flout our export controls, specifically those who do so to the benefit of Vladimir Putin and the detriment to the Ukrainian people, will feel the full force of the Department’s enforcement.” . . .
“Companies that violate the expansive export controls we have imposed on Russia will find themselves the target of Commerce Department enforcement action,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. …
The TDOs issued today represent the first enforcement actions taken by BIS in response to Russia’s invasion of Ukraine, and the severe restriction in export privileges of these companies is a reminder to parties in Russia as well as throughout the rest of the world that U.S. legal authorities are substantial, far-reaching, and can have a meaningful impact on access to global commerce by parties found to be in violation of U.S. law.
BIS has led the Department of Commerce’s efforts in response to Russia’s invasion of Ukraine by taking a number of powerful regulatory actions and issuing public notice to the global community as to potential violations of the EAR in the civilian aerospace sector. On February 24, 2022, BIS imposed expansive controls on aviation-related items to Russia, including a license requirement for the export, reexport or transfer (in-country) to Russia of any aircraft or aircraft parts on the Commerce Control List. On March 2, 2022, BIS further excluded any aircraft registered in, owned, or controlled by, or under charter or lease by Russia or a national of Russia from being eligible for license exception Aircraft, Vessels, and Spacecraft (AVS).
Accordingly, any U.S.-origin aircraft or foreign aircraft that includes more than 25% controlled U.S.-origin content is subject to a license requirement if, for example, it is Russianowned or operated and exported to Russia.
On March 18, 2022, BIS publicly released a list of private and commercial aircraft it had been tracking as likely operating in violation of the EAR. This action notified the public that, absent authorization from BIS, the operation of, or service to, any aircraft on the list or owned by Russian parties in violation of the EAR may lead to enforcement actions from BIS, which may include substantial jail time, fines, loss of export privileges, or other restrictions.
BIS further updated the list on April 30, 2022 and will continue to maintain and update the list as circumstances warrant. The list and additional information on BIS’s actions in response to the Russian invasion is available online here: https://bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus. Aeroflot, Utair, and Azur Air engaged in and continue to engage in recent conduct prohibited by the EAR by operating controlled aircraft subject to the EAR without the required BIS authorization. Pursuant to Section 746.8 of the EAR, all international flights conducted by the aforementioned airlines into Russia would have required export or reexport licenses from BIS.
Additionally, any domestic Russian flights by the same airlines on aircraft reexported to Russia after March 2, 2022 without the required BIS license are also in violation of General Prohibition Ten (GP10). GP10 prohibits continuing with transactions knowing that a violation has occurred or is about to occur.
- Aeroflot operated multiple aircraft subject to the EAR, including, but not limited to, on flights into and out of Moscow, Russia from/to Beijing, China; Delhi, India; Antalya and Istanbul, Turkey; and Dubai, United Arab Emirates, respectively. Aeroflot subsequently operated some of the same aircraft on domestic flights between Moscow, Russia and Vladivostok, Russia and Petropavlovsk-Kamchatsky, Russia, respectively.
- Azur Air operated multiple aircraft subject to the EAR, including, but not limited to, on flights into and out of Moscow, Russia from/to Antalya, Turkey; Male, Maldives; Dubai, United Arab Emirates; and Nha Trang, Vietnam, respectively. Azur Air subsequently operated some of the same aircraft on domestic flights between Moscow, Russia and Samara, Russia; Irkutsk, Russia; Kaliningrad, Russia; Mineralnye Vody, Russia; and Novosibirsk, Russia, respectively.
- UTair operated multiple aircraft subject to the EAR, including, but not limited to, on flights into and out of Russia from/to Khujand and Dushanbe, Tajikistan; Yerevan, Armenia; Baku and Ganja, Azerbaijan; Jeddah, Saudi Arabia; and Tashkent, Uzbekistan, respectively. UTair subsequently operated some of the same aircraft on domestic flights between Moscow, Russia and Syktykar, Russia and Ukhta, Russia, respectively.
Links to the TDOs are available here:
- Aeroflot TDO text:https://go.usa.gov/xucsy
- Azur Air TDOtext:https://go.usa.gov/xucs7
- UTair TDO text:https://go.usa.gov/xucskThe issuance of a TDO is one of the most significant civil sanctions under the EAR and is issued by the Assistant Secretary for Export Enforcement to deny the export privileges of a company or individual to prevent an imminent or on-going export control violation. These BIS TDOs were issued under the authority of the Export Control Reform Act of 2018 and the EAR.
State/DDTC Publishes End-Use Monitoring Report for FY 2021
(Source: State/DDTC, 15 Apr 2022) [Excerpts]
* Report to Congress on End-Use Monitoring of Defense Articles and Defense Services 22 USC 2785(c): End-Use Monitoring of Defense Articles and Defense Services
This report summarizes the Department of State’s administration of the Blue Lantern end-use monitoring program for FY 2021. The Blue Lantern program fulfills requirements stipulated in section 40A of the Arms Export Control Act (AECA) (22 U.S.C. 2785) and delegated to the Department of State in Executive Order 13637 (March 8, 2013).
The program monitors the end-use of defense articles, technical data, and defense services exported through commercial channels, as well as brokering activities, and subject to Department of State licenses or other approvals under section 38 of the AECA and the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130), which implement section 38 of the AECA.
The Blue Lantern program is managed by the Country and End-Use Analysis Division (CEA), Office of Defense Trade Controls Policy, Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs. The Blue Lantern program’s mission is to help ensure the security and integrity of U.S. defense trade.
The program is designed to minimize the risk of diversion and unauthorized use of U.S. defense articles, combat gray arms trafficking, uncover violations of the AECA, and build confidence and cooperation among defense trade partners. Blue Lantern end-use monitoring includes pre-license, post-license/pre-shipment, and post-shipment checks to verify the bona fides of foreign consignees and end-users, confirm the legitimacy of proposed transactions, and to the extent possible, provide “reasonable assurance that –
(i) the recipient is complying with the requirements imposed by the United States government with respect to use, transfers, and security of defense articles and defense services; and
(ii)such articles and services are being used for the purposes for which they are provided.” . . . [continued here]
* End-Use Monitoring of Defense Articles and Services Government-to-Government Services
In 1996, Congress amended [Public Law 104-164] Section 40A [22 U.S.C. 2785] of the Arms Export Control Act (AECA) requiring the President to establish a program that provides for the End-Use Monitoring (EUM) of defense articles and defense services sold, leased, or exported under the AECA or under the Foreign Assistance Act (FAA) of 1961. Section 40A also requires an annual report to Congress on the actions taken to implement the EUM program, to include detailed accounting of the costs and number of personnel associated with the monitoring program.
This report describes Department of Defense (DoD) actions taken to comply with AECA EUM requirements for defense articles and services transferred through the Foreign Military Sales (FMS) program. As required by Section 40A, this report is submitted under section 634 of the Foreign Assistance Act of 1961 [22 U.S.C. 2394] . . . [continued here]
Commerce/Census: “Exports Between the United States and Puerto Rico: When to File Electronic Export Information for Electronic Goods and Vehicles”
(Source: Global Reach Blog, 19 Apr 2022)
* Author: Maurice Hinton, Trade Regulations Branch, Economic Management Division
In this blog, we explore two scenarios for export shipments between the U.S. and Puerto Rico and identify the U.S. Principal Party in Interest (USPPI). Let’s dive right in.
Question: A company in Puerto Rico purchases electronic goods from a U.S. company. The company in Puerto Rico is not physically in the U.S. when the goods are purchased so it authorizes a “freight forwarder” – a person or company – to facilitate the shipment from the U.S. to Puerto Rico. Who is the USPPI?
Answer: The USPPI is the U.S. company since the company in Puerto Rico was not physically in the U.S. when the goods were purchased or obtained. Additionally, the address that should be reported in the Electronic Export Information (EEI) is the U.S. location where the goods start their journey to the port of export. In this scenario, the company in Puerto Rico and its address cannot be listed as the USPPI since it was not in the U.S. when the goods are purchased or obtained.
Question: A company in Puerto Rico purchases a vehicle online from an auction house and hires a freight forwarder to ship it to the company in Puerto Rico. Is the U.S. auction house the USPPI?
Answer: The auction house may be the USPPI if it owns the vehicle that it is selling or meets the definition of an “order party.” Foreign Trade Regulations (FTR), Section 30.1, defines an order party as, “The person in the United States that conducts the direct negotiations or correspondence with the foreign purchaser or ultimate consignee and who, as a result of these negotiations, receives the order from the Foreign Principal Party in Interest (FPPI). If a U.S. order party directly arranges for the sale and export of goods to the FPPI, the U.S. order party shall be listed as the USPPI in the EEI.”
Some of the duties an order party may fulfill that are associated with arranging for the sale and export of goods are as follows:
- Listing the vehicle for sale.
- Determining eligible buyers and sellers.
- Conducting the sale or auction.
- Soliciting, negotiating and receiving bids from buyers.
- Accepting payment from the buyer.
To arrange the export, the order party must complete actions such as, but not limited to:
- Coordinating or transporting the goods from the auction house lot or storage facility to the FPPI’s forwarder or chosen location in the U.S.
- Providing the foreign buyer or freight forwarder documents and all necessary export information including value, Schedule B/ Harmonized Tariff Schedule of the United States (HTSUS) Code and Export Control Classification Number (ECCN)
- Screening goods and foreign parties to make sure those consignees and/or foreign buyers are not on the S. Department of the Treasury Specially Designated Nationals and other prohibited entity lists.
The U.S. freight forwarder would not be the USPPI since typically its sole responsibility is to physically ship goods and process export documentation, which may include the EEI.
Have additional questions or need immediate assistance? Get in touch with us at <email@example.com> or 1-800-549-0595 (option 3).
Treasury/OFAC: “Russia-Related Designations and Designation Update; Issuance of Russia-related General Licenses”
(Source: Treasury/OFAC, 20 Apr 2022)
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued Russia-related General License 28 and General License 29. In addition, the following names have been added or updated to OFAC’s list of Specially Designated Nationals. SPECIALLY DESIGNATED NATIONALS LIST UPDATE [Names available HERE.]
Question: What obligations do operators of credit card systems have under the Russian Harmful Foreign Activities Sanctions Regulations, 31 C.F.R. part 587 (RuHSR), and the Belarus Sanctions Regulations, 31 C.F.R. part 548 (BSR), with regard to payment cards issued by sanctioned Russian financial institutions?
Answer: Pursuant to the RuHSR and BSR, U.S. persons, including U.S. operators of credit card systems and U.S. acquirers, are prohibited from processing transactions involving certain sanctioned foreign financial institutions, unless exempt or authorized by OFAC. Non-U.S. operators of credit card systems whose payment cards are issued by sanctioned foreign financial institutions may also be in violation of OFAC-administered sanctions regulations if they allow those cards to be used in the United States.OFAC encourages U.S. persons, including U.S. operators of credit card systems and U.S. acquirers, to exercise caution and due diligence in dealing with non-U.S. operators of credit card systems that are known to host payment cards issued by sanctioned foreign financial institutions and whose payment cards are accepted in the United States. Examples of due diligence measures may include requesting Bank Identification Numbers (BINs) associated with sanctioned foreign financial institutions, disabling those BINs from operation in the United States, and requesting that non-U.S. operators of credit card systems prevent the use of payment cards issued by sanctioned foreign financial institutions in the United States at the network level.
UK Export Controls: “Updated List of Dual-Use Controlled Items”
Notice to exporters 2022/16: updated list of dual-use controlled items. This notice advises on updates to the dual-use control list to reflect changes agreed by the international strategic control regimes: NTE 2022/16: updated list of dual-use controlled items.