The Bureau of Industry and Security recently reminded exporters (here) that annual reports of offsets agreements related to the sale of defense articles or services to foreign countries and firms are due June 15. U.S. companies are required to report to BIS annually on sales subject to offsets agreements over $5 million in value, or performance of offsets valued at $250,000 or more under existing commitments. An example of this type of agreement is offsetting the cost of a foreign government’s purchase of military aircraft by providing training assistance to plant managers in the purchasing country, BIS said.

President Donald Trump's nominee for director of the Bureau of Industry and Security will be tasked with participating in the administration's review of whether export control reform (ECR) will continue for the remaining three U.S. Munitions List (USML) categories that haven’t been covered by that effort. A Commerce Department spokesman said that administration officials are evaluating whether to transfer items to the CCL from USML Categories I (firearms, close assault weapons, and combat shotguns), II (guns and armament) and III (ammunition/ordnance), the final USML categories that haven’t undergone ECR. Started in 2010 by the Obama administration, ECR has shifted several items to the CCL from other USML categories.

The Census Bureau is amending its Foreign Trade Regulations to reflect current export filing requirements in the International Trade Data System (ITDS) and add a new data element in the Automated Export System for original Internal Transaction Numbers (ITN), it said (here). In a change from its proposed rule, Census will not create a new data element to report used electronics, it said. The final rule takes effect July 18.

The Bureau of Industry and Security is updating the designation of the Russian Federal Security Service (aka, the FSB) on the Entity List to conform with an Office of Foreign Assets Control general license issued Feb. 2 allowing certain transactions with the foreign entity related to the importation, distribution or use of certain information technology products in Russia, BIS said (here). The final rule will modify the license requirement column for that entity to clarify that the Entity List’s license requirements don’t apply to items subject to the Export Administration Regulations related to OFAC transactions pursuant to Cyber-related General License 1, as long as the transactions don’t involve exportation, re-exportation or provision of any goods technology, or services to the Crimea region of Ukraine “and do not otherwise violate [Executive Order] 13757.”

The Bureau of Industry and Security is denying the export privileges of a Virginia man convicted of "willfully attempt[ing] to export and cause the exportation of firearms parts and accessories designated as defense articles under Category I of the U.S. Munitions List," BIS said (here). U.S. District Court for the District of Maryland on Aug. 12, 2015 convicted Sam Rafic Ghanem of taking the actions to ship the goods to Lebanon without first obtaining the required license or authorization from the State Department, BIS said. The agency is suspending Ghanem's export privileges until Aug. 12, 2025.

The Bureau of Industry and Security is denying for five years the export privileges of a Texas man convicted of attempting to export from the U.S. a defense article on the U.S. Munitions List without having a State Department license or authorization, BIS said (here). U.S. District Court for the Middle District of Florida convicted Eyad Farah of violating Section 38 of the Arms Export Control Act on Dec. 15, 2015. Farah was sentenced to 37 months in prison, 36 months of release and a $300 assessment. The five-year denial is retroactive to the date of conviction.

Chinese multinational ZTE agreed to plead guilty and pay $430.5 million to the U.S. government to settle charges that it illegally shipped dual-use U.S.-origin wireless and wireline infrastructure hardware to customers in Iran for almost six years, obstruction of justice, and “making a material false statement,” DOJ announced (here). In total, ZTE agreed to pay the government $892.4 million, under the impending guilty plea and settlement agreements reached with the Commerce Department's Bureau of Industry and Security (BIS) and Treasury's Office of Foreign Assets Control, DOJ said. BIS suspended another $300 million in penalties, which ZTE will pay if it breaches its settlement with the agency, DOJ said. ZTE lied to federal investigators and “deceived their own counsel and internal investigators” about the illegal acts, Attorney General Jeff Sessions said in a statement. An independent corporate compliance monitor will review and report on ZTE’s export compliance program over the next three years, during which the company will remain on corporate probation, according to DOJ’s announcement.

Eleven individuals and one company, AW-Tronics, in Florida were charged with exporting prohibited dual-use articles to Syria in violation of the U.S. trade embargo with that country, the Justice Department said (here). The defendants were charged for their alleged participation in a conspiracy to violate the International Emergency Economic Powers Act, the Export Administration Regulations, and the Global Terrorism Sanctions Regulations by exporting the goods to Syrian Arab Airlines, an entity designated and blocked by the Office of Foreign Assets Control.

The Bureau of Industry and Security is again extending a temporary general license that maintains normal licensing requirements for exports, re-exports and in-country transfers to Zhongxing Telecommunications Equipment (ZTE) Corporation and ZTE Kangxun, until March 29, BIS said (here). The temporary license was previously set to expire Feb. 27, after BIS three times extended the original deadline of June 30 (see 1606270013, 1608180009 and 1611170019). After announcing sanctions against ZTE, ZTE Kangxun and two affiliated firms on March 8, 2016, alleging the companies conspired to re-export controlled defense-related items to Iran contrary to U.S. law (see 1603070001), BIS on March 24 created the temporary license to restore the pre-sanction licensing and other policies of the Export Administration Regulations regarding exports, re-exports and transfers to the companies.

SANTA CLARA, Calif. -- The Bureau of Industry and Security is turning up its enforcement focus on illicit shipments to Russia and Ukraine after the U.S. issued several sanctions against Moscow in December, Joseph Whitehead, special agent in charge of the BIS San Jose Field Office, said during the Annual Export Control Forum. The U.S. ordered sanctions in response to alleged interference in U.S. election processes and alleged harassment of U.S. personnel in Russia (see 1612300010). “From an investing in special agents standpoint, we are thirsting for Russian cases right now,” Whitehead said. “So we do look for those, and go after them.” There has been an uptick in export violations vis-a-vis Russia since the executive branch first ratcheted up sanctions against the country in 2014 following its invasion of Crimea, he said.