The U.S.’s new Russia export controls could lead to a short-term spike in license applications, but volumes will likely taper off later this year as businesses divest from Russia, said Nazak Nikakhtar, a former senior U.S. export control official.
As global trade restrictions against Russia continue to increase, some companies are grappling with whether to fully exit the Russian market or rely on sanctions screening and temporary carve-outs to keep their operations afloat, lawyers and experts said in interviews this month. But the risks for a majority of businesses are quickly becoming too high, especially as sanctions are expected to grow more punishing.
The U.S. announced a host of new sanctions and export controls, including two new additions to the Entity List, to further penalize Russia and Belarus for the invasion of Ukraine. The measures place new restrictions on technology and software exports to Belarus, export controls on shipments of oil and gas extraction equipment to Russia, blocking sanctions on 22 Russian defense entities and a prohibition on Russian cargo planes flying to and from the U.S.
The U.S. is imposing additional sanctions and new export controls following Russia's "further invasion of Ukraine," as promised by President Biden in his Feb. 22 speech (see 2202220003). The sanctions cover financial restrictions on Russian state-owned enterprises, banks, and individuals, while the export controls set restrictions on a variety of high-tech products. The new measures are part of an "unprecedented level of multilateral cooperation" according to the White House.
The Commerce and Treasury Departments announced a raft of new export controls and sanctions measures against Russia in press releases issued Feb. 24 following White House remarks by President Joe Biden. The measures include export control license requirements for a broad swath of the Commerce Control List, and the expansion of sanctions, including to entities in Belarus. The Bureau of Industry and Security also released a final rule on the export control changes, which take effect Feb. 24.
The Census Bureau Feb. 18 emailed tips on how to address the most frequent messages generated this month in the Automated Export System. Response code 515 is a fatal error for when the Export Control Classification Number wasn’t reported in the right format. The ECCN must be reported in a “NANNN format, where N is a numeric character and A is an alpha character,” the agency said. Census said the filer should verify the ECCN, correct the shipment and resubmit.
In her first public remarks since joining the Bureau of Industry and Security, Thea Kendler said BIS has been constantly looking for new emerging technologies that should be subject to controls and is close to publishing its first foundational technology rule. Kendler, who was confirmed last month as assistant secretary for export administration, also said she plans to prioritize multilateral export controls that protect American technology from China’s military and wants to work closely with industry so those controls don’t harm U.S. competitiveness.
As the U.S. and the European Union both prepare their own set of Russian sanctions and export controls, a senior U.S. official said the measures may not be identical but will align very closely to avoid hurting the competitiveness of U.S. firms. Peter Harrell, a National Security Council official, also said the trade restrictions won’t amount to an embargo against “everyday” Russian consumers, and will likely include exemptions and a wind-down period.
The Commerce Department’s Sensors and Instrumentation Technical Advisory Committee submitted three Wasseanar proposals to Commerce to consider for the 2022 cycle, including two updates to previously submitted proposals. The proposals, which involve Category 6 items (sensors and lasers) on the Commerce Control List, include diode laser bar controls (6A005.d.1.c.1), an updated proposal for green lasers (6.A.5.b.3.a.2) and an updated proposal for certain semiconductor lasers (6.A.5.d.1.a), the committee said during a Jan. 25 meeting.
Peter Sotis and Emilie Voissem, two Florida residents, were sentenced Jan. 12 for conspiring to and illegally attempting to ship export-controlled rebreather diving equipment to Libya, the Department of Justice said. Sotis will spend 57 months in prison while Voissem will serve a five-month sentence in prison and a five-month term in home confinement. The scheme to illegally export the rebreather equipment -- an item that is export controlled due to its enhanced underwater breathing capabilities and dual use as a military and civilian item -- was hatched in August 2016.