The Treasury Department is considering extending the deadline by which three U.S. allies must meet certain criteria to remain eligible for a foreign investment review exemption, the agency said last week. Treasury’s proposed rule would extend the deadline for one year to give Australia, Canada and the United Kingdom more time to cement their positions as excepted foreign states and excepted real estate foreign states, which excludes them from certain screening requirements by the Committee on Foreign Investment in the U.S. Comments on the proposal are due Dec. 15.
Industry lawyers are preparing for a surge in enforcement of the Foreign Corrupt Practices Act (see 2107210058) following a wave of recently added enforcement officials and promises by the Biden administration to aggressively target anti-corruption. Lawyers also said new policies by the Department of Justice may lead to an increase in penalty amounts and change how companies decide whether to self-report.
A United Arab Emirates bank violated the U.S.’s now-repealed Sudanese Sanctions Regulations when it illegally processed more than 1,700 payments for Sudanese banks, the Office of Foreign Assets Control said Nov. 9. The bank, Mashreqbank psc, was issued a “finding of violation” by OFAC instead of a fine, partly because the bank voluntarily entered into a “retroactive statute of limitations waiver agreement,” which allowed OFAC to charge Mashreq with the sanctions violations.
The Bureau of Industry and Security fined a Pennsylvania-based scientific equipment manufacturer $80,000 for illegally exporting goods to Huawei and HiSilicon Technologies in 2019, according to a Nov. 8 enforcement order. The company, SP Industries, exported more than $170,000 worth of goods to the Chinese technology companies just after they were added to the Entity List (see 1905160072).
The U.S. announced new, coordinated sanctions this week against a virtual currency exchange for processing ransomware-related transactions, and designated several companies and people for supporting the exchange and “perpetuating” ransomware attacks in the U.S. The Treasury Department’s Financial Crimes Enforcement Network also updated its ransomware payment advisory, which includes new information on ransomware trends.
The Commerce Department should tread carefully when imposing new export controls, foreign investment restrictions and limits on standards collaboration, which may jeopardize the U.S.’s position in global information and communications technology supply chains, U.S. companies and trade groups told the agency this month. Some of those regulatory restrictions are already having chilling effects on U.S. competitiveness, they said, as foreign firms and countries can quickly fill voids in overseas markets and leadership positions in global standards bodies.
Some record-keeping and reporting requirements in the International Traffic in Arms Regulations are burdensome and causing unnecessary issues for defense exporters and the State Department’s Directorate of Defense Trade Controls, industry told DDTC last week. The agency can take several steps to ease these burdens, including through more automation when submitting reporting notifications and more clarity of ITAR requirements.
The State Department's Directorate of Defense Trade Controls is preparing to publish new compliance program guidelines to help industry better meet agency compliance expectations, an official said. DDTC is also “close” to rolling out its new open general license concept, another official said, which would allow blanket approvals for certain shipments to close U.S. allies, potentially including Five Eyes alliance members.
The Biden administration is still working through a sweeping review of its arms transfer policies, which is expected to place more of an emphasis on human rights concerns while helping to remove foreign barriers to U.S. defense exporters, said Tim Betts, a senior State Department official. He said the agency is in the middle of an “intensive” interagency process and “wide ranging” discussions with industry and Congress to determine how best to revise its conventional arms transfer policies, which could represent a more cautious approach compared with the previous administration.
The Bureau of Industry and Security added four technology companies in Israel, Russia and Singapore to the Entity List for “acting contrary” to U.S. foreign policy and national security through “malicious cyber activities,” BIS said in a notice released Nov. 3. The companies either operate or supply technologies in the cyberintelligence and information security sectors and will be subject to a license review policy of presumption of denial for all items subject to the Export Administration Regulations. No license exceptions will be available for controlled exports to the four companies. The additions are effective Nov. 4.