Companies receiving a subpoena from U.S. sanctions and export control agencies should be “careful not to over respond,” which can lead to more questions from the government and potentially an expanded investigation, Torres Trade Law said in an Oct. 31 client alert. Although businesses receiving a subpoena are generally required to respond, the company should first take time to determine why it received the request and have “internal discussions with relevant personnel to gain an understanding of the situation before submitting a response.” It’s “always a good idea to review the scope of an information request and be deliberate in responding within those parameters,” the firm said.
The U.S. this week announced a spate of new Russia-related sanctions and export controls, targeting people and companies supplying Russia’s military, aiding its defense industrial complex or operating in various Russian financial, metals, government and procurement sectors. The measures include additions to the Commerce Department’s Entity List and more than 200 combined sanctions by the Treasury and State departments targeting businesses in China, the United Arab Emirates and elsewhere for sending export-controlled components to Russia.
The Bureau of Industry and Security is inching closer toward potentially publishing a final rule that could revise export licensing requirements for certain cameras, systems or related components. The rule, sent for interagency review Oct. 31, will “better align controls with technological and commercial developments,” BIS said. The rule has been on the BIS regulatory agenda for several years (see 2307170038, 2206270007 and 2112210044).
The U.S. this week unsealed two indictments charging multiple people in schemes to deliver export-controlled dual-use goods to Russia. In both cases, DOJ charged Russian nationals and others with using Brooklyn-based companies to buy goods on behalf of sanctioned end-users or others connected to Russia's military.
The Bureau of Industry and Security added 13 entities from Russia and Uzbekistan to its Entity List for helping Russia procure and develop unmanned drones. The entities, listed in a final rule effective Nov. 2, are subject to license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed under a policy of denial, apart from certain food and medicine. The entities are also subject to licensing restrictions under the BIS Russia/Belarus-Military End User Foreign Direct Product rule.
The Bureau of Industry and Security is preparing to revamp its website, said Tirrell McKnight, an official with the BIS western regional office. She said the site is in "beta evaluation" and could be launched as soon as January. "We have heard from you all that it's cumbersome and it's dated," McKnight said Oct. 28 during the Pacific Coast Council's Western Cargo Conference, known as Wesccon. "Look for an upgrade to our website relatively soon."
Forwarders should think carefully before they file an export license application on behalf of a customer, a service that could make the forwarder liable in case of an export violation, said Tirrell McKnight, an official with the Bureau of Industry and Security's western regional office. McKnight suggested export application services should only be offered by forwarders who are confident in their export compliance, know their customers well and “want to take on that liability.”
A new executive order on artificial intelligence signed by President Joe Biden this week doesn’t explicitly mention export controls or other trade restrictions, but it does outline the administration's goal of working with other countries to protect against dangerous uses of AI and maintaining U.S. leadership in the technology. The Commerce Department also said the Bureau of Industry and Security, as well as other agency offices, will "be responsible for carrying out a significant portion of the EO’s objectives."
The Bureau of Industry and Security recently published a set of frequently asked questions to provide guidance for exports to Israel. BIS said it’s able to expedite certain Israel-related export applications in light of the ongoing war in the region. It said the Palestinian territories of Gaza and the West Bank aren't recognized as separate destinations from Israel under the Export Administration Regulations, so items that require a license for Israel also need a license for those Palestinian territories.
A Commerce Department decision last week to suspend new export licenses for certain firearms, parts and ammunition caught the industry by surprise and has caused confusion about what types of shipments will be impacted. The announcement came after an uptick in license processing times in recent months, an industry lawyer said, and could lead to a surge in purchases of U.S. firearms by foreign customers that fear the suspension could be a harbinger of permanent change.