A United Arab Emirates manufacturer will pay about $660,000 as part of a settlement agreement for violating U.S. sanctions against North Korea, the Office of Foreign Assets Control said in a July 16 notice. Essentra FZE Company Limited, a cigarette filter and tear tape manufacturer, illegally exported cigarette filters to North Korea through a network of front companies, including companies in China, OFAC said. Essentra FZE was paid for the shipments through a bank account belonging to a foreign branch of a U.S. bank.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The Commerce Department’s long-awaited proposed regulations on routed export transactions may not be issued until next year, a Census Bureau official said. Both Census and the Bureau of Industry and Security have been working closely on the rule but have struggled to pinpoint a release date. “I thought it would happen this year, but I'm going to go with probably 2021,” Kiesha Downs, chief of Census’ Foreign Trade Division’s regulations branch, said during a July 15 webinar hosted by Census. “It's just a matter of ironing out a couple more things.”
President Donald Trump’s executive order ending preferential treatment for Hong Kong details a range of sanctions authorities and export bans but includes a carve-out for certain defense exports authorized before the order was issued. The State Department’s Directorate of Defense Trade Controls issued a July 15 guidance to clarify the new restrictions and answer industry questions.
The Commerce Department published its spring 2020 regulatory agenda for the Bureau of Industry and Security. The agenda includes a new mention of a rule to control “software” for the operation of “automated nucleic acid assemblers and synthesizers” capable of designing and building “functional genetic elements from digital sequence data.” BIS said the software can be used in the production of pathogens and toxins, with the potential for those to make their way into biological weapons if export controls on the software are lacking. The notice of proposed rulemaking, part of BIS’ effort to control emerging and foundational technologies (see 2005190052), will request industry comments about how the controls might affect “legitimate commercial or scientific applications.” BIS said it aims to issue the proposed rule this month.
China announced sanctions on U.S. lawmakers and a congressional commission in response to U.S. sanctions on Chinese officials for human rights abuses in the Xinjiang region. China’s sanctions, which include travel restrictions, target Sens. Marco Rubio, R-Fla.; Ted Cruz, R-Texas; and Rep. Chris Smith, R-N.J.; U.S. Ambassador for International Religious Freedom Sam Brownback; and the Congressional-Executive Commission on China, Beijing’s Foreign Ministry said July 13. A ministry spokesperson said the U.S. has “no right and no cause to interfere” in Xinjiang and urged the U.S. to rescind its sanctions or it will issue a “further response.”
The European Union is considering countermeasures, including export restrictions, in response to Beijing’s interference in Hong Kong’s autonomy, Josep Borrell, the EU’s foreign policy chief, said during a July 13 press conference. The measures will include a “package” of EU-wide restrictions, although some member states may announce their own national measures in the “coming days,” Borrell said.
Companies affected by the Bureau of Industry and Security's recent rule on military-related exports (see 2004270027) were frustrated by the lack of a comment period before the rule was finalized and BIS’s decision not to postpone the effective date, industry officials said in interviews. Some officials said they were disappointed the new requirements were not first issued as a proposed rule, adding that smaller businesses with fewer compliance department employees have struggled to adjust.
The U.S. sanctioned a Chinese security agency and four officials for human rights abuses in the Xinjiang region. The sanctions, announced July 9 by the Treasury and State departments, came about a month after President Donald Trump signed into law a bill that authorized sanctions on Chinese officials for human rights violations against the country’s Uighur population (see 2006170064).
The upcoming U.S. presidential election and the increasing government focus on China will likely “exacerbate risk” for companies with supply chains in China’s Xinjiang region, law firm Covington said. The region has come under scrutiny for human rights abuses and has been a recent focal point of U.S. sanctions.
The Commerce Department on July 8 issued a guidance on the transfer of gun export controls from the State Department (see 2001170030). The 62-page guidance, which includes more than 100 frequently asked questions, outlines Commerce’s approach to the controls, including licensing exceptions, arms reporting, export clearance requirements, recordkeeping and enforcement. The guidance also defines several “key terms” for exports that it now controls, such as the difference between additive manufacturing and 3D printing.