The Commerce Department again renewed a temporary export denial order for Mahan Airways because the airline continues to violate the order and the Export Administration Regulations. Mahan Airways has been on the banned list since 2008, and Commerce in its May 5 notice said the Iranian airline has continued to fly to and from Iran from Russia and China in violation of U.S. export controls. It also said the airline in April reportedly began direct flights from Iran to Minsk, Belarus, and also has helped repair planes belonging to Russia's Aeroflot, which is also subject to a temporary denial order (see 2303300013). The latest renewal for Mahan is for 180 days from May 5.
Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.
The State Department’s Directorate of Defense Trade Controls released guidance to help exporters comply with a proposal that could introduce new filing requirements for certain U.S. Munitions List items. The guidance -- which deals with a proposed rule by the Census Bureau that could require exporters to submit a new data element in the Automated Export System when shipping USML Category XXI items (see 2305020007) -- features a range of frequently asked questions, including about how exporters can determine whether their items are controlled under Category XXI, when exporters should use the data element and more.
U.S. export controls and investment restrictions can successfully maintain America’s lead over China in sensitive technologies, including semiconductors, said Michele Flournoy, a former Defense Department official. But she also warned against policies that could push the U.S. toward decoupling from Beijing, saying the government needs to do a better job working with industry to craft the restrictions.
A bill introduced in the Senate last week could create new export authorizations -- including a new open general license for certain defense exports and a new license exception for dual-use goods -- to expedite shipments to Australia, Canada and the U.K. The legislation, introduced by Sens. Jim Risch, R-Idaho, and Bill Hagerty, R-Tenn., also would allow the State Department to hire more export license review officers, create a “fast-track” foreign military sales process, reduce barriers to information sharing within the Australia-U.K.-U.S. partnership and more.
The Treasury Department is proposing to add eight military bases that would fall under the jurisdiction of the Committee on Foreign Investment in the U.S., including an Air Force base in North Dakota that was the subject of a controversial CFIUS decision last year. The proposed rule, released May 4 by Treasury’s Office of Investment Security, also would amend the definition for “military installation” to include six additional U.S. states. Comments on the changes are due June 5.
A potential Chinese military invasion of Taiwan could lead to an unprecedented level of new sanctions and export controls against Beijing, including U.S. financial sanctions against major Chinese companies and export prohibitions on anything related to the country’s military, trade lawyer David Wolber said. Banks in particular are concerned about the possibility of sweeping financial restrictions, Chloe Cina of Deutsche Bank said, adding that some are beginning to prepare for a worst-case sanctions scenario.
The Census Bureau this week proposed that exporters submit a new data element in the Automated Export System when shipping items classified under U.S. Munitions List Category XXI. Census said the proposed change, previewed by an agency official last month (see 2304260047), could help the Commerce Department “collect additional data” on Category XXI exports, which includes articles, technical data and defense services “not otherwise enumerated” under other USML categories.
An influx of delisting requests spurred by the rapid pace of sanctions against Russia could strain already limited resources at the Treasury Department, former officials and lawyers said, increasing fears that removal efforts will be overlooked even as law firms see an uptick in business.
Cryptocurrency trading platform Poloniex reached a $7.5 million settlement with the Office of Foreign Assets Control this week to resolve allegations that it violated U.S. sanctions. The Delaware-based company allowed customers in sanctioned jurisdictions to trade, deposit and withdraw digital assets worth a combined $15 million, OFAC said, adding that Poloniex didn’t voluntarily disclose the alleged violations.