The Bureau of Industry and Security added 11 parties to its Entity List this week for procuring items to support Iranian drone programs, China’s military modernization efforts or Russia’s military. The additions, outlined in a final rule released April 10 and effective April 11, include technology companies, logistics firms and one person based in either China, Russia or the United Arab Emirates.
The Bureau of Industry and Security will add 11 parties to the Entity List for trying to ship or procure export-controlled items for Russia, Iran or to support China’s military modernization efforts, the agency said April 10. The additions include technology companies, logistics firms and one person based in either China, Russia or the United Arab Emirates. Effective April 11, the companies are subject to license requirements for all items subject to the Export Administration Regulations, and licenses will be reviewed either under a presumption of denial or policy of denial, except for certain food or medicine.
Banks are facing rising pressure from regulators to catch red flags that may signal export control evasion, lawyers and industry officials said this week. As that pressure mounts, they said many financial institutions still struggle to understand how much and what type of due diligence is needed to catch customers that may be violating export controls.
The Bureau of Industry and Security completed nearly a quarter of its end-use checks with a “less than favorable outcome” in FY 2023, a Commerce Department official said, meaning the agency couldn’t verify those end-users as a reliable recipient of U.S.-origin export-controlled goods.
Latvian citizen Oleg Chistyakov was charged with violating U.S. export laws as part of a scheme to ship "sophisticated avionics equipment" to Russian companies, DOJ announced last week. The agency noted Chistyakov is the third person to be charged in connection to the scheme, which was led by Kansas company KanRus Trading Co.
U.S. companies interested in divesting Russian assets that are subject to the Export Administration Regulations may need to obtain multiple licenses from the U.S. government, a Commerce Department official said March 28.
Deputy Treasury Secretary Wally Adeyemo and Estonian Foreign Minister Margus Tsahkna met this week to discuss Russia-related sanctions evasion. Treasury said Adeyemo stressed the importance of “strengthening the international response” to Russia through combating “the evasion of sanctions and export control measures,” and “both confirmed the importance of enforcement of the” global price cap on Russian oil. The U.S. has sanctioned Estonia-based companies (see 2403250029), and in October added others to the Commerce Department’s Entity List (see 2310060044) for helping Russia evade sanctions and export controls.
The U.S. last week sanctioned 15 members of the Mexico-based Sinaloa Cartel and six Mexican businesses for their involvement in a “Black Market Peso Exchange” scheme to launder millions in illegal fentanyl proceeds for the cartel. The designations target cellphone businesses and their owners, fentanyl suppliers, money launderers, food service companies and clothing retailers, a former Mexican police officer and more.
China’s Commerce Ministry urged the U.S. against placing new export controls on companies linked to Huawei after hearing the U.S. is reportedly considering adding them to the Commerce Department’s Entity List.
Although entities on the Treasury and Defense departments’ Chinese military company lists aren't necessarily subject to export controls, it's still very risky to do certain business with them, former Bureau of Industry and Security officials said this week. They said they would advise companies to treat those listed entities as prohibited Chinese military end-users unless they can prove otherwise.