The State Department’s Directorate of Defense Trade Controls this week updated and issued a host of new guidance to address industry questions related to debarments, disclosures and export controls violations. The 17 new FAQs, published about three weeks after the agency said it was preparing new guidance at the request of the Defense Trade Advisory Group, address a range of compliance issues, among them what should be included in voluntary disclosures, how the agency treats those disclosures, how they affect licensing, and differences between a debarment rescission and reinstatement of export privileges.
The Commerce Department and the State Department are considering final rules that would revise export controls for goods destined to Cambodia. Under its final rule, Commerce’s Bureau of Industry and Security would revise certain restrictions for Cambodia under the Export Administration Regulations, while the State Department would add Cambodia to its list of proscribed countries in the International Traffic in Arms Regulations. Both agencies sent their respective rules for interagency review Nov. 16.
Export Compliance Daily is providing readers with the top stories for Nov. 8-12 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.
The United Kingdom’s new foreign investment screening law may draw more industry filings than first expected, Baker McKenzie lawyer Sunny Mann said. Although the U.K.’s new National Security and Investment Act doesn’t officially take effect until Jan. 4, Mann said many companies are already showing signs they plan to be careful and notify the U.K. before closing investment deals, rather than waiting for the government to intervene.
The Bureau of Industry and Security revoked export privileges for Manuel Valencia-Hermosillo for illegally exporting ammunition and magazines to Mexico, BIS said in a Nov. 9 order. The agency said Valencia-Hermosillo violated the Arms Export Control Act when he shipped 11,000 rounds of Wolf 7.62 X 39mm ammunition, 100 Palmetto State Armory 5.56 rifle magazines and 100 Korean 7.62 X 39 rifle magazines, all of which were controlled under the U.S. Munitions List. Valencia-Hermosillo was convicted Oct. 13, 2017, and sentenced to 15 months in prison, three years of supervised release and a $100 fine. BIS denied Valencia-Hermosillo’s export privileges for seven years from the date of conviction.
The Bureau of Industry and Security on Nov. 8 revoked export privileges for four people after they illegally exported a range of military-related items, including weapons parts, ammunition and technical data for defense items. Hersel Lincoln McKenzie was convicted Jan. 8, 2020, after illegally exporting 7.62 x 39 mm ammunition to Mexico, BIS said. McKenzie was sentenced to one year and one day in prison and a $100 fine. BIS denied McKenzie’s export privileges for five years from the date of conviction.
The State Department’s Directorate of Defense Trade Controls has experienced email “disruptions” with its customer service inbox and may not have received messages sent in July, August, September and October, DDTC said in a recent notice. Emailers should resend their messages to DDTCCustomerService@state.gov if they haven’t received a response with a case number.
Senate Foreign Relations Committee members introduced a bill Nov. 4 that would require more export controls and sanctions against those contributing to or profiting from the civil war in Ethiopia. The bill, introduced by committee Chair Sen. Bob Menendez, N.J., ranking member Sen. Jim Risch, R-Idaho, and Sen. Chris Coons, D-Del., “builds upon” the U.S.’s Ethiopian sanctions regime by requiring “targeted sanctions” against people and entities undermining peace in the country, doing certain business with senior government leadership, providing weapons to the warring parties and more. Although the Biden administration in September established a new Ethiopian sanctions regime (see 2109170036) and recently increased export restrictions for defense exports to Ethiopia (see 2110290004), the U.S. hasn’t yet issued specific sanctions.
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.