Export Compliance Daily is providing readers with some of the top stories for Aug. 17-21 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
The Bureau of Industry and Security released its long-awaited pre-rule for foundational technologies and asked industry to comment on the types of technologies BIS should target for potential controls. BIS is specifically looking for feedback on a definition for foundational technologies, criteria for identifying them, how the controls might impact their development and the potential benefits of end-use or end-user based controls as opposed to technology-based controls.
The Bureau of Industry and Security plans to add 60 entities to the Entity List, including 24 entities for helping the Chinese military build artificial islands in the South China Sea. BIS will also designate entities in France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland and the United Arab Emirates for a range of activities, including illegal exports to Iran, submitting false information to BIS, contributing to Russian biological weapons programs and more.
The Trump administration will likely continue to impose restrictions on transactions with large Chinese technology companies, particularly as the Committee on Foreign Investment in the U.S. places more scrutiny on Chinese investments involving personal data, trade lawyers said. Industry should prepare for more announcements similar to President Donald Trump’s executive orders on TikTok and WeChat (see 2008070024), one lawyer said.
Russia recently introduced a bill to revise regulations for its sanctions regimes and its countermeasures against U.S. sanctions, an Aug. 21 EU Sanctions blog post said. Among other changes, the bill would expand the scope of sanctions to apply to entities owned or controlled 25% or more by a sanctioned person or entity. The bill would also impose reporting requirements for financial institutions on measures they are taking to implement sanctions, and create a new penalty that would suspend or revoke a financial institution's license “in the event of repeated sanctions violations,” the post said.
The Commerce Department’s lengthy rollout of export controls over emerging and foundational technologies may be impeding congressionally mandated export control reform measures and the work of the Committee on Foreign Investment in the U.S., the Congressional Research Service said in a report Aug. 21. Commerce’s effort, mandated by the Export Control Reform Act of 2018, has resulted in several export control notices, including on geospatial imagery software (see 2001030024) and items agreed to by multilateral control bodies (see 2006160034). But Commerce has yet to release its advance notice of proposed rulemaking for foundational technologies (see 2008040008), and the pace of the controls has frustrated some in industry (see 2002040057 and 1911070014).
The Bureau of Industry and Security issued an order temporarily denying export privileges for three Indonesian companies and three people for illegally exporting U.S. aircraft parts to Iran’s Mahan Air. In an Aug. 20 press release, BIS said the companies operate an “international procurement scheme” for the sanctioned Iranian airline and will be barred from exporting or receiving U.S.-origin goods for 180 days. The suspension may be renewed.
Secretary of State Mike Pompeo officially initiated a United Nations process to reimpose sanctions under the Iran nuclear deal after failing to convince the U.N. to extend an Iranian arms embargo (see 2008170017 and 2008190036). Pompeo said other U.N. members privately wanted the arms embargo extended but did not stand publicly with the U.S.
Registration and licensing applications for the State Department’s Defense Export Control and Compliance System will be unavailable 6 a.m. to 8 a.m. EDT Aug. 24, an Aug. 20 notice said. The system will be down for scheduled maintenance, the State Department said, and users should save work in progress before the downtime commences.
Two U.S. citizens, Muzzamil Zaidi and Asim Naqvi, and Pakistani national Ali Chawla were charged with violating the International Emergency Economic Powers Act after they allegedly arranged for transport of U.S. currency from the U.S. to Iran for Supreme Leader Ali Khamenei in 2018 and 2019, the Justice Department said Aug. 19. After the U.S. sanctioned Khamenei in 2019 (see 1906240046), all three allegedly were involved in collecting U.S. currency from donors through a “religious tax” authorized by Khamenei, sometimes transporting the money first to Iraq, then Iran. The Justice Department alleges Zaidi and Naqvi structured the shipments to “avoid reporting requirements.” Zaidi, who resides in Iran; Naqvi, who lives in Houston; and Chawla, who lives in Iran, each face a maximum 20-year prison sentence for violating the IEEPA.