Iranian national Mehrdad Ansari, a resident of the United Arab Emirates and Germany, was convicted by a federal jury for exporting sensitive military items to Iran in violation of the Iranian Trade Embargo, the Department of Justice said in a May 7 news release. Ansari transshipped dual-use civilian and military goods using his company, Gulf Gate Sea Cargo, located in the UAE, during 2007-2011. In this period, Ansari obtained or attempted to obtain more than 105,000 parts valued at $2.6 million, representiing more than 1,250 transactions, DOJ said. None received an export license from the Treasury's Office of Foreign Assets Control or the Commerce Department. The goods could be used in systems for nuclear weapons, missile guidance, secure tactical radio communications, offensive electronic warfare, military electronic countermeasures, and radar warning and surveillance, DOJ said.
The U.S. District Court for the District of Columbia granted a preliminary injunction for Chinese big data processing technology company Luokung Technology Corp., temporarily blocking the company's designation as a Chinese military company. Judge Rudolph Contreras issued the injunction in a May 5 ruling, finding it likely Luokung would prevail in its case against the designation. The publicly traded Chinese tech giant claims that the Communist Chinese Military Company (CCMC) designation issued by the Department of Defense was made in violation of the Administrative Procedure Act, was arbitrary and capricious, and that the evidence in hand was not substantial enough to support a finding of state control over the company.
Following the Department of Justice's first resolution of action under a new export control tool, greater efforts should be made to conduct export-related due diligence and act on those recommendations, according to a May 6 analysis from Sidley Austin. Merely conducting audits of exports and sanctions is not good enough anymore, Sidley said. Implementing audit recommendations and putting in place a robust process to receive, investigate and elevate whistleblower complaints should be a priority following the DOJ's settlement with German software company SAP SE.
Export Compliance Daily is providing readers with the top stories for April 26-30 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.
Forwarders are seeing a rise in maximum penalties issued by CBP for violations surrounding ocean shipments that occurred over a year ago, National Customs Brokers & Forwarders Association of America officials said. Joe Brogan, the chair of NCBFAA’s export compliance subcommittee, said CBP officers are increasingly digging up old violations where forwarders submitted incorrect transportation-related information, such as the date of export or the port of export, and have levied penalties higher than $14,000 for a “single occurrence.”
President Joe Biden has made his choices for several senior positions at Treasury, including the agency’s top sanctions and foreign investment officials, Bloomberg reported April 30. Biden will nominate attorney Brian Nelson to be undersecretary of the Terrorism and Financial Intelligence office, which oversees the Office of Foreign Assets Control, and attorney Josh Berman to be assistant secretary overseeing Treasury’s work on the Committee on Foreign Investment in the U.S., according to the report.
The Office of Foreign Assets Control moved its Non-Specially Designated Nationals Communist Chinese Military Companies (NS-CCMC) List from a temporary PDF to a “standard OFAC list file format,” the agency said April 30. The list data will now be included in the agency’s “Non-SDN Consolidated Data Files” for machine processing, and “human-readable versions” will be available on a dedicated landing page. OFAC stressed that the change is “only an administrative, technical action.”
The Office of Foreign Assets Control on April 30 deleted five entries from its Specially Designated Nationals List. The entries were listed with addresses in Iraq. OFAC didn’t immediately provide more information.
The Office of Foreign Assets Control fined a Texas money transfer company more than $34,000 for committing over 350 sanctions violations, OFAC said April 29. The company, MoneyGram Payment Systems, voluntarily disclosed the violations in 2017 (see 2011040041) after it provided services to blocked people in U.S. prisons and processed transactions on behalf of a sanctioned person and people doing business in Syria. OFAC said MoneyGram “had reason to know” the transactions “may” have exposed them to sanctions but followed through with them because of screening failures or “based on an erroneous misunderstanding” of its compliance obligations.
A German software company agreed to pay more than $8 million in fines after it admitted to violating U.S. export controls and sanctions against Iran, the Justice, Treasury and Commerce departments announced April 29. The company, SAP SE, came to settlement agreements with all three agencies after it voluntarily disclosed the violations, which included illegal exports and reexports of U.S.-origin software.