Since our last post, U.S. export control agencies have continued take actions that may impact your business. Ranging from the huge multi-agency settlement agreement raising supply chain issues to tweaks to the USML to updated guidance and reports, we have the highlights below.
Multi-Agency Actions
3D Systems Corporation Multi-Agency Settlement
- New consent agreement and settlements highlight supply chain concerns (February 27, 2023)
- Violations by Quickparts subsidiary:
- Exports of controlled data to China and Taiwan for sourcing on-demand manufacturing services (some related to NASA & DOD contracts)
- Controlled data on German server
- Unlicensed access by Foreign Person Employees
- Inadequate recordkeeping
- Additional issues:
- No formal compliance program or employees until 2017
- No written export compliance procedures
- No export compliance training
- No export compliance strategy for IT
- No document retention policy
- Department of State (AECA/ITAR)
- $20 million civil penalty
- Special Compliance Officer (SCO)
- 2 external audits
- Department of Commerce (IEEPA/EAR)
- $2.77 million civil penalty
- 2 external audits
- Department of Justice (False Claims Act)
- Up to $4.54 million civil penalty
Guidance to Industry on Iran’s UAV-Related Activities
- Describes key items sought by Iranian UAV programs and relevant controls and sanctions.
- OFAC website, June 9, 2023
Department of State: DDTC / ITAR
ITAR Amendment expands scope of Canadian Exemption, Australia Treaty, and UK Treaty:
- Supplement No. 1 to part 126 amended to expand the list of eligible defense articles and defense services that may be exported.
- Changes relate to torpedoes, submarine combat control system mounting racks and cabinets, underwater acoustic decoy countermeasures, and Category IV and XII defense services.
- 88 FR 21910, April 12, 2023
Interim final rule removes certain high-energy storage capacitors removed from USML Category XI:
- Adds a voltage rating of one hundred twenty-five volts (125 V) criterion to XI(c)(5) (high-energy storage capacitors), formalizing a temporary suspension from 2022.
- Requests comments on the implementation practical effects of the new threshold, as well as potential alternatives.
- 88 FR 25488, April 27, 2023
Open General License Nos. 1 and 2 updated and extended:
- Cover qualifying retransfers within and reexports among Australia, Canada, and the United Kingdom
- Validity extended by 3 years, plus clarifying edits
- 88 FR 35992, June 1, 2023
Blue Lantern and Golden Sentry Reports Released
- Blue Lantern report (direct commercial sales)
- Golden Sentry report (FMS)
Department of Commerce: BIS / EAR & CCL
Voluntary Self-Disclosure (VSD) Policy
- Intended to incentivize submission of VSDs by highlighting potential costs of not filing and encouraging disclosures about the conduct of others.
- BIS website, April 18, 2023
As always, if you need more information or assistance in any of these areas, ECS is here to help!