Although the Bureau of Industry and Security in FAQs this week suggested its new 50% rule applies only to ownership and not the control that a parent company may have over an affiliate, that doesn’t mean U.S. exporters should ignore an Entity Listed company’s controlling influence over an unlisted company, said Mike Huneke, a trade lawyer with Morgan Lewis.
Senate Banking Committee member Mark Warner, D-Va., urged the Bureau of Industry and Security on Sept. 30 to consider placing export controls on open-source technologies that could benefit China.
House Foreign Affairs Europe Subcommittee Chairman Keith Self, R-Texas, unveiled a bill Sept. 30 to codify a new interim final rule that will place subsidiaries on the Bureau of Industry and Security’s Entity List or Military End-User List if they are owned 50% or more by companies on those lists.
The Bureau of Industry and Security this week fined British Virgin Islands-based company Hallewell Ventures and its owner, Albert Avdolyan, $374,474 for violating sanctions against Russia. BIS said Hallewell illegally reexported a Bombardier Global 7500 jet from the Maldives to Russia without a license.
A Canada-headquartered biotechnology company agreed to pay the Bureau of Industry and Security $685,051 after admitting to illegally exporting water quality testing and analytical instruments to Iran. BIS said the company knew the shipments violated U.S. export controls, adding that it worked to “conceal” the destination of the exports by falsely listing a United Arab Emirates freight forwarder as the ultimate consignee, undervalued the items to avoid UAE customs scrutiny, and left out references to Iran in the invoice.
Processing of most export license applications, as well as sanctions licenses, will pause during the government shutdown that began Oct. 1, although export enforcement operations and national security-related investigations will continue, the Commerce, State and Treasury departments said this week.
The 60-day temporary general license in the Bureau of Industry and Security's new 50% rule (see 2509290017) is “very limited” and could push exporters to apply for licenses “on an expedited basis to avoid noncompliance,” Morgan Lewis said in a client alert.
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The Bureau of Industry and Security's new 50% rule only applies to ownership, not the “control” that a parent company may have over an affiliate, the agency said in new FAQs. Other FAQs stress that the government’s Consolidated Screening List is no longer exhaustive, clarify how license exceptions may apply to unlisted affiliates, explain how BIS will determine whether a U.S. exporter has “knowledge” that a listed entity owns part of a non-listed foreign affiliate, and more.
Steven Emme, former chief strategy officer for the Bureau of Industry and Security, has joined Akin as an international trade partner, the firm announced. Emme worked multiple stints at the Commerce Department since 2007, including as BIS chief strategy officer beginning in 2023, before leaving earlier this year. His practice will focus on international trade and national security, including issues related to U.S. export control and sanctions regulations.