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 7,500 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 Witt, Salvatore Di Misa, and Elina Tsapouri.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Blacklists Venezuelan Airline Conviasa; The Daily Bugle; Monday, 10 February 2020; Item #4.
- UK ECJU Amends Guidance on Export of Nuclear Equipment, Material and Technology: ‘Trigger List’ Requirements; The Daily Bugle; Monday, 10 February 2020; Item #5.
- Treasury Announces 2020 National Illicit Finance Strategy; The Daily Bugle; Wednesday, 12 February 2020; Item #4.
- Commerce/BIS Seeks Comments on Effects CWC Implementation on Commercial Activities; The Daily Bugle; Thursday, 13 February 2020; Item #1.
- State/ISN Imposes Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement; The Daily Bugle; Friday, 14 February 2020; Item #1.
1. Treasury/OFAC Blacklists Venezuelan Airline Conviasa
(Source: Treasury/OFAC, 7 Feb 2020) [Excerpts]
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today identified the Venezuelan state-owned airline Consorcio Venezolano de Industrias Aeronauticas y Servicios Aereos, S.A. (CONVIASA) as subject to sanctions as part of the Government of Venezuela, pursuant to Executive Order (E.O.) 13884. Today’s action also identifies the CONVIASA fleet of aircraft as blocked property of the Government of Venezuela pursuant to E.O. 13884. Conviasa and its fleet have been blocked since the issuance of E.O. 13884 of August 5, 2019, and today they have been added to the OFAC’s Specially Designated Nationals List to ensure strengthened compliance with U.S. sanctions. . . .
CONVIASA operates as a commercial airline based in Caracas, Venezuela, flying both domestic routes as well as providing service to select international locations. This action does not prevent the ability of the Venezuelan people to travel, as they can continue to travel on various other carriers not subject to OFAC sanctions. Rather, this action is intended to curtail the Maduro regime’s misuse of the airline. For instance, the Maduro regime has commandeered CONVIASA’s aircraft to promote its own political agenda, including shuttling regime officials to countries such as North Korea, Cuba, and Iran.
The following CONVIASA aircraft are blocked property of the Government of Venezuela. . . .
OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.
2. UK ECJU Amends Guidance on Export of Nuclear Equipment, Material and Technology: ‘Trigger List’ Requirements
(Source: UK ECJU, 10 Feb 2020) [Excerpt]
Added link to further information on exporting nuclear and dual-use goods and services through Iran procurement channel
The Export Control Organisation (ECO) is responsible for legislating, assessing and issuing export licences for a wide variety of controlled goods. One particular category of controlled goods which requires an export licence is nuclear equipment, material and technology.
This guidance is for exporters who want to export certain types of sensitive nuclear items which are detailed in what is known as the Nuclear Suppliers Group (NSG) ‘Trigger List’, so called because exports of such material triggers the requirement for safeguards.
This guide explains how the ECO, together with the Nuclear Unit – Non Proliferation (NU-NP) team in the Department of Energy and Climate Change (DECC), assess these applications and sets out the important factors that exporters should bear in mind when applying for a licence.
This information is for guidance only. It is not a statement of law. Before exporting you should refer to the legal provisions in force at the time. Where legal advice is required exporters should make their own arrangements. . . .
3. Treasury Announces 2020 National Illicit Finance Strategy
(Source: Treasury/OFAC, 6 Feb 2020)
The U.S. Department of the Treasury today issued the 2020 National Strategy for Combating Terrorist and Other Illicit Financing (2020 Strategy), which provides a roadmap to modernize the U.S. anti-money laundering/countering the financing of terrorism (AML/CFT) regime to make it more effective and efficient. The 2020 Strategy identifies key threats, vulnerabilities, and priorities for disrupting and preventing illicit finance activities within and transiting the U.S. financial system, and builds upon and updates the 2018 National Strategy for Combating Terrorist and Other Illicit Financing, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA).
“The 2020 National Illicit Finance Strategy identifies key illicit finance vulnerabilities and provides solutions that will adapt our AML/CFT regime to future challenges,” said Secretary Steven T. Mnuchin. “This whole-of-government approach provides a roadmap for a number of significant regulatory reforms designed to modernize our AML/CFT framework.”
The 2020 Strategy represents a comprehensive effort by the Trump Administration to assess key 21st century illicit finance challenges and identify solutions 50 years after the passage of the first AML/CFT law in the United States, the Bank Secrecy Act. The 2020 Strategy articulates three strategic priorities:
1) Increasing transparency and closing gaps in the U.S. AML/CFT legal framework;
2) Improving the efficiency and effectiveness of the U.S. AML/CFT regulatory and supervisory framework for financial institutions; and
3) Enhancing current AML/CFT operational capabilities.
These three priorities are supported by a number of enabling actions, including legislative proposals on beneficial ownership, expanding AML/CFT obligations to certain “uncovered” financial institutions and supporting responsible AML/CFT innovation and augmenting public-private partnerships.
The 2020 Strategy, as well as the 2018 National Risk Assessments, identifies the most significant illicit finance threats, vulnerabilities, and risks facing the United States. Financial institutions will find these documents helpful in informing their own risk assessments, and examiners will be able to use them in assessing whether AML/CFT compliance is tailored to the risks faced by their supervised entities. Other U.S. Government agencies, including law enforcement agencies and policymakers, will also find that the 2020 Strategy and 2018 National Risk Assessments inform a risk-based approach to their work that is flexible enough to address threats in real time. This is consistent with efforts currently underway in forums such as the Bank Secrecy Act Advisory Group, where regulators, law enforcement, and the private sector are looking at ways to improve the efficiency and effectiveness of the U.S. AML/CFT framework.
The National Illicit Finance Strategy was prepared by the Office of Terrorist Financing and Financial Crimes, in consultation with the many agencies, bureaus, and departments of the federal government that also have roles in combating illicit finance.
Read the 2020 National Illicit Finance Strategy.
4. Commerce/BIS Seeks Comments on Effects CWC Implementation on Commercial Activities
(Source: Federal Register, 13 Feb 2020)
85 FR 8246-8247: Impact of the Implementation of the Chemical Weapons Convention (CWC) on Legitimate Commercial Chemical, Biotechnology, and Pharmaceutical Activities Involving “Schedule 1” Chemicals (Including “Schedule 1” Chemicals Produced as Intermediates) During Calendar Year 2019
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Notice of inquiry.
* SUMMARY: The Bureau of Industry and Security (BIS) is seeking public comments on the impact that implementation of the Chemical Weapons Convention (CWC), through the Chemical Weapons Convention Implementation Act and the Chemical Weapons Convention Regulations (CWCR), has had on commercial activities involving “Schedule 1” chemicals during calendar year 2019. The purpose of this notice of inquiry is to collect information to assist BIS in its preparation of the annual certification to the Congress on whether the legitimate commercial activities and interests of chemical, biotechnology, and pharmaceutical firms are harmed by such implementation. This certification is required under Condition 9 of Senate Resolution 75 (April 24, 1997), in which the Senate gave its advice and consent to the ratification of the CWC.
* DATES: Comments must be received by March 16, 2020.
* ADDRESSES: You may submit comments by any of the following methods (please refer to RIN 0694-XC055 in all comments and in the subject line of email comments): …
* FOR FURTHER INFORMATION CONTACT: …
Request for Comments
In order to assist in determining whether the legitimate commercial activities and interests of chemical, biotechnology, and pharmaceutical firms in the United States are significantly harmed by the limitations of the Convention on access to, and production of, “Schedule 1” chemicals as described in this notice, BIS is seeking public comments on any effects that implementation of the CWC, through the Chemical Weapons Convention Implementation Act and the CWCR, has had on commercial activities involving “Schedule 1” chemicals during calendar year 2019. To allow BIS to properly evaluate the significance of any harm to commercial activities involving “Schedule 1” chemicals, public comments submitted in response to this notice of inquiry should include both a quantitative and qualitative assessment of the impact of the CWC on such activities.
Submission of Comments
All comments must be submitted to one of the addresses indicated in this notice. The Department requires that all comments be submitted in written form. BIS will consider all comments received on or before March 16, 2020. All comments, including those comments containing any personally identifying information or information for which a claim of confidentially is asserted either in the comments or their transmittal emails, will be made available for public inspection and copying. Parties who wish to comment anonymously may do so by submitting their comments via Regulations.gov, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself. …
5. State/ISN Imposes Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement
(Source: Federal Register, 14 Feb 2020) [Excerpts.]
85 FR 8618-8619: Imposition of Nonproliferation Measures Against Foreign Persons, Including a Ban on U.S. Government Procurement
* AGENCY: Bureau of International Security and Nonproliferation, State.
* ACTION: Notice.
* SUMMARY: A determination has been made that a number of foreign persons have engaged in activities that warrant the imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria
Nonproliferation Act. The Act provides for penalties on foreign entities and individuals for the transfer to or acquisition from Iran since January 1, 1999; the transfer to or acquisition from Syria since January 1, 2005; or the transfer to or acquisition from North Korea since January 1, 2006, of goods, services, or technology controlled under multilateral control lists (Missile Technology Control Regime, Australia Group, Chemical Weapons Convention, Nuclear Suppliers Group, Wassenaar Arrangement) or otherwise having the potential to make a material contribution to the development of weapons of mass destruction (WMD) or cruise or ballistic missile systems. The latter category includes items of the same kind as those on multilateral lists but falling below the control list parameters when it is determined that such items have the potential of making a material contribution to WMD or cruise or ballistic missile systems, items on U.S. national control lists for WMD/missile reasons that are not on multilateral lists, and other items with the potential of making such a material contribution when added through case-by-case decisions.
* DATES: The imposition of measures pursuant to Section 3 of the Iran, North Korea, and Syria Nonproliferation Act described in this notice went into effect February 3, 2020.
* FOR FURTHER INFORMATION CONTACT: On general issues: Pam Durham, Office of Missile, Biological, and Chemical Nonproliferation, Bureau of International Security and Nonproliferation, Department of State, Telephone (202) 647-4930. For U.S. Government procurement ban issues: Eric Moore, Office of the Procurement Executive, Department of State, Telephone: (703) 875-4079.
* SUPPLEMENTARY INFORMATION: On February 3, 2020, the U.S. Government applied the measures authorized in Section 3 of the Iran, North Korea, and Syria Nonproliferation Act (Pub. L. 109-353) against the following foreign persons identified in the report submitted pursuant to Section 2(a) of the Act:
- Baoding Shimaotong Enterprises Services Company Limited (China) and any successor, sub-unit, or subsidiary thereof;
- Dandong Zhensheng Trade Co., Ltd. (China) and any successor, sub-unit, or subsidiary thereof;
- Gaobeidian Kaituo Precise Instrument Co. Ltd (China) and any successor, sub-unit, or subsidiary thereof;
- Luo Dingwen (Chinese individual);
- Shenzhen Tojoin Communications Technology Co. Ltd (China) and any successor, sub-unit, or subsidiary thereof;
- Shenzhen Xiangu High-Tech Co., Ltd (China) and any successor, sub-unit, or subsidiary thereof;
- Wong Myong Son (individual in China);
- Wuhan Sanjiang Import and Export Co., Ltd (China) and any successor, sub-unit, or subsidiary thereof;
- Kata’ib Sayyid al-Shuhada (KSS) (Iraq) and any successor, sub-unit, or subsidiary thereof;
- Kumertau Aviation Production Enterprise (Russia) and any successor, sub-unit, or subsidiary thereof;
- Instrument Building Design Bureau (KBP) Tula (Russia) and any successor, sub-unit, or subsidiary thereof;
- Scientific Production Association Mashinostroyeniya (NPOM) (Russia) and any successor, sub-unit, or subsidiary thereof;
- Eren Carbon Graphite Industrial Trading Company, Ltd. (Turkey) and any successor, sub-unit, or subsidiary thereof.
Accordingly, pursuant to Section 3 of the Act, the following measures are imposed on these persons:
(1) No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from these foreign persons, except to the extent that the Secretary of State otherwise may determine;
(2) No department or agency of the United States Government may provide any assistance to these foreign persons, and these persons shall not be eligible to participate in any assistance program of the United States Government, except to the extent that the Secretary of State otherwise may determine;
(3) No United States Government sales to these foreign persons of any item on the United States Munitions List are permitted, and all sales to these persons of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and
(4) No new individual licenses shall be granted for the transfer to these foreign persons of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended.
These measures shall be implemented by the responsible departments and agencies of the United States Government and will remain in place for two years from the effective date, except to the extent that the Secretary of State may subsequently determine otherwise. . . .