Commerce Secretary Gina Raimondo suggested her agency has no plans to remove Huawei from the Entity List and said she will aggressively use trade tools to compete with China. But she also said she will prioritize efforts to invest in U.S. technology industries over imposing more export restrictions. “My broad view is what we do on offense is more important than what we do on defense,” Raimondo told reporters April 7. “To compete in the long run with China, we need to rebuild America in all of the ways we're talking about.”
The Bureau of Industry and Security added seven Chinese “supercomputing” entities to the Entity List for procuring U.S.-origin items in a way that harms U.S. national security and supports China’s military, BIS said in a final rule that takes effect today. The rule imposes a license requirement for all items subject to the Export Administration Regulations, and BIS will impose a license review policy of presumption of denial. No license exceptions will be available.
Export Compliance Costs, Awareness Likely to Increase for Aircraft Transactions Following Indictment
Export compliance costs and awareness will likely rise for aircraft transactions due to increased compliance by aircraft sellers following the seizure of 12 aircraft on export violation charges, Vedder Price's David Hernandez said. In an April 5 report, Hernandez looked at the impacts of the indictments of eight individuals charged with drug trafficking and export violation conspiracies, including the owner of Aircraft Guaranty Corporation (see 2103010028). The indictments arose from a series of investigations into the customs export practices of U.S.-based trust companies serving as trustees in aircraft ownership trusts with non-U.S. citizens, called Non-Citizen Trusts.
The president of a Long Island, New York-based cosmetics company, Michael Rose, was arrested for allegedly selling more than $350,000 in cosmetic goods to an Iranian importer in violation of U.S. sanctions on the Middle Eastern nation, the U.S. Attorney's Office for the Southern District of New York announced in an April 6 news release. Between 2015 and 2018, Rose, of Ridgefield, Connecticut, allegedly exported the goods to an Iranian importer to fulfill a contract the two parties signed, making the importer the sole distributor of Rose's cosmetics in Iran. The goods skirted U.S. sanctions via front companies that had Rose sending his cosmetics to the United Arab Emirates. Rose also allegedly filed false and misleading information on Commerce Department Shipper's Export Declaration forms, declaring that the “ultimate consignee” for the goods was the UAE and not Iran.
The United Nations Security Council removed a diamond trading company based in the Central African Republic from its sanctions list, it said April 5. The move deletes the entry for Bureau D’achat de Diamant en Centrafrique/Kardiam.
The Office of Foreign Assets Control on April 6 sanctioned three people and two entities for their association with the sanctioned Cartel de Jalisco Nueva Generacion (CJNG). The designations target Carlos Andres Rivera Varela and Francisco Javier Gudino Haro, two CJNG members who have helped carry out assassinations for the Mexican drug cartel. OFAC also sanctioned travel agent Alejandro Chacon Miranda, who helps book travel for senior CJNG members, and his company Dale Tours. Also sanctioned was Gudio Haro’s company Agricola Costa Alegre S.P.R. de R.L., an agricultural company.
The Office of Foreign Assets Control mistakenly sanctioned a restaurant owner in Italy, his company and an Italian graphic design company before deleting the designations last week (see 2103310018), Reuters reported April 1. The designations, issued during the final days of the Trump administration (see 2101190017), targeted Alessandro Bazzoni, the owner of a pizzeria in Italy, according to the report. The sanctions were intended to target a different Alessandro Bazzoni, whom the administration said was involved in a sanctions evasions network operating in Venezuela. The Italy-based Bazzoni told Reuters the designations were a “mistake.” OFAC didn’t comment.
The Office of Foreign Assets Control issued guidance April 5 clarifying that it generally won’t pursue sanctions against humanitarian-related transactions or exports to Syria as long as the items wouldn’t normally require an OFAC license. The guidance was issued about a week after the U.S. committed to providing more humanitarian aid to respond to the Syria crisis.
Export Compliance Daily is providing readers with the top stories for March 29-April 2 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
The Commerce Department should be careful not to place unilateral export restrictions on semiconductors and should invest heavily in domestic chip innovation, technology companies told the agency in comments due this week. But at least one think tank urged Commerce to pursue more strict controls and argued that decoupling from China along the semiconductor supply chain is inevitable.