Export Compliance Daily is providing readers with the top stories for March 1-5 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
The Bureau of Industry and Security has placed its foreign military intelligence rule (see 2101140035) on hold and may not implement the rule’s changes later this month, a BIS official said. Although the rule was published in the Federal Register in January, BIS included it in the Biden administration’s regulatory freeze because it wasn’t scheduled to take effect until March 16.
The Bureau of Industry and Security denied a New Jersey man export privileges after he illegally exported electronic components to Russia, BIS said in a March 8 order. BIS denied Alexander Brazhnikov export privileges for 15 years. Brazhnikov pleaded guilty to the charges in 2015 and was sentenced to 70 months in prison in 2016 (see 1607010044).
The Bureau of Industry and Security denied export privileges for a German aircraft maintenance company and fined it more than $50,000 for procuring U.S. parts and components for a sanctioned Iranian airline. MSI Aircraft Maintenance Services International GmbH & Co. worked with Iran’s Mahan Airways (see 2011270001) to illegally export U.S.-origin reservoir and valve assemblies, which were controlled under the Export Administration Regulations, BIS said in a March 5 order. The agency said it will waive MSI’s three-year export denial if the company pays the fine, cooperates with BIS during a three-year probationary period and doesn’t commit any more EAR violations.
Five companies said they may have violated U.S. sanctions, export controls or anti-corruption laws, according to their February Securities and Exchange Commission filings. The potential violations involved illegal exports, providing services to sanctioned territories and gift cards sent to the Chinese government.
The Bureau of Industry and Security's January rule that expanded export restrictions on foreign military intelligence agencies (see 2102190042) and other activities of U.S. companies could lead to expansive licensing requirements and place burdensome compliance obligations on U.S. companies, Akin Gump said in a March 1 letter to BIS. The law firm said it represents a client that may be affected by the rule’s broad language and urged the agency to narrow its breadth to limit impacts on legitimate business.
The Bureau of Industry and Security issued new restrictions on exports to Myanmar and added four entities to the Entity List in response to the country’s military-led coup last month (see 2102110020). The restrictions, which take effect March 8, increase controls on certain “sensitive” items, remove certain license exceptions, impose a more strict licensing policy and subject Myanmar to BIS’s military end-use and end-user restrictions (see 2012220027), according to a final rule released March 4.
The Bureau of Industry and Security outlined its licensing policy for the 14 additions to the Entity List announced earlier this week (see 2103020067) and made several corrections to the list, a final rule released March 2 said. BIS will impose a license requirement for all items subject to the Export Administration Regulations that are destined to the 14 Russian, German and Swiss entities, the rule said. The license requirement will also apply if any of the entities acts as a “purchaser, intermediate consignee, ultimate consignee, or end-user,” BIS added, and no license exceptions will be available. All exports and reexports that now require a license as a result of the Entity List additions but were aboard a carrier to a port as of March 4 may proceed to their destinations under the previous eligibility, BIS said.
The U.S. needs to modernize its approach to export controls and expand disclosure requirements for foreign investment screening to maintain its technology dominance over China, a U.S. national security commission said in a report this week. The commission called current U.S. export controls outdated, urged the Commerce Department to more quickly control emerging and foundational technologies, and said the Committee on Foreign Investment in the U.S. should review a broader set of transactions to protect sensitive technologies.
The Bureau of Industry and Security recently expanded its commodity classification request process to include the Department of Defense, which is expected to slightly increase processing times and potentially require more thorough submissions of classification requests, an agency official said. The Defense Department began participating in the process late last year as part of BIS’s implementation of the 2018 Export Control Reform Act, said John Varesi, an official in BIS’s Sensors and Aviation Division. ECRA “required that there would be an interagency effort in terms of the commodity classifications,” Varesi said during a March 2 Sensors and Instrumentation Technical Advisory Committee meeting. “This is basically the implementation of that requirement.”