Since our last update, more export control actions have taken place that may affect your business. Ranging from country-specific business advisories to a new ITAR Consent Agreement to major changes to BIS semiconductor controls, we have the highlights below.
Multi-Agency Actions
Advisory to Industry on Iran Ballistic Missile Procurement
- Departments of Justice, Commerce, State and Treasury (OFAC) issue advisory describing key items sought by Iranian ballistic missile programs, relevant controls and sanctions, and ongoing enforcement efforts.
- Relevant items include production and testing equipment, goods and materials for production, electronics, and guidance, navigation, and control equipment.
- Department of Justice, October 18, 2023.
Department of State: DDTC / ITAR
South Sudan Business Advisory
- Risks and Considerations for U.S. Businesses and Individuals Operating in South Sudan
- Includes areas of risk, particularly related to corruption and human rights concerns.
- South Sudan remains an ITAR prohibited destination under 126.1(w).
- Press Release, August 14, 2023.
Island Pyrochemical Consent Agreement
- Island Pyrochemical Industries Corp. settled allegations that it violated the International Traffic in Arms Regulations (ITAR) in connection with unauthorized brokering involving a corporation from the People’s Republic of China, a proscribed country and false statements on license applications.
- Violations relate to brokering of Chinese-origin ammonium perchlorate (APC), controlled under USML Category V(d)(2) between 2015 and 2016.
- Three-year Consent Agreement provides for a Special Compliance Officer, implementation of compliance measures, an automated export compliance system, at least one external audit, and a civil penalty of $850,000 (half suspended for compliance measures).
- DDTC Penalties & Oversight Agreements, August 25, 2023
Cyprus Continues to be Removed From § 126.1
- Republic of Cyprus’ status as a proscribed destination is suspended from October 1, 2023, through September 30, 2024
- 88 FR 63016, September 14, 2023.
DDTC Issues ITAR Compliance Risk Matrix
- Identifies areas of risk for business activities, organization, and compliance programs.
- Includes supplement for universities.
- September 15, 2023 on DDTC website
Department of Commerce: BIS / EAR & CCL
Commerce Control List: Updates Based on the Latest Nuclear Suppliers Group (NSG) Plenary Meetings
- Revises ECCNs 1B229 (removed), 1B231, 2B209, 2B228, and 3A233.
- 88 FR 56462, August 18, 2023.
Implementation of 2022 Wassenaar Arrangement Decisions and Request for Comments on License Exception Eligibility for Certain Supersonic Aero Gas Turbine Engine Component Technology
- Interim Final Rule revises controls on multiple items and requests comments on restricting eligibility for License Exception STA for technology for the development of supersonic aero gas turbine engine components under 9E003.k (formerly 9E001).
- Revisions 14 ECCNs, with editorial revisions to technical notes in 55 ECCNs.
- 88 FR 71932, October 18, 2023.
- Comments accepted through December 4, 2023.
Firearms Pause & Review
- BIS announces 90 day pause on firearms export licenses to non-governmental users.
- Intended to assess current firearm export control policies, particularly with regard to regional stability, human rights, and crime concerns.
- Applies to ECCNs 0A501, 0A502, 0A504, and 0A505 to non-governmental end users.
- Applies worldwide except end users located in Ukraine, Israel, or a country in Country Group A:1.
- Country Group A:1 includes 40 Wassenaar Arrangement Participating States (excluding Malta, Russia, and Ukraine), and largely overlaps with other NATO+ lists.
- Previously approved licenses are not affected. New applications may continue to be submitted, but will be Held Without Action (HWA).
- BIS memo October 27, 2023.
BIS Expands Semiconductor Controls
- BIS has released multiple updates to export controls on advanced computing and semiconductor manufacturing items to the People’s Republic of China.
- Advanced Computing Chips Rule (AC/S IFR)
- Adjusts parameters that determine whether an advanced computing chip requires a license.
- Imposes new measures to address risks of circumvention – applies to companies and subsidiaries worldwide, if headquartered in Macau or destinations subject to U.S. arms embargo.
- 88 FR 73458, October 25, 2023 (effective November 17, 2023). Comments will be accepted through December 18, 2023.
- Expansion of Export Controls on Semiconductor Manufacturing Items Interim Final Rule (SME IFR)
- Imposes controls on additional types of semiconductor manufacturing equipment.
- Codifies U.S. person restrictions previously provided as guidance.
- Expands license requirements to countries for which the U.S. maintains an arms embargoes (Country Group D:5 or ITAR 126.1).
- 88 FR 73424, October 25, 2023 (effective November 17, 2023). Comments will be accepted through December 18, 2023.
- Addition to the Entity List of 13 entities involved in the development of advanced computing chips (88 FR 71991).
- For additional background, see:
- BIS Press Release, October 17, 2023.
- BIS Newsroom on November 6, 2023 Briefing (recording to be released) and overview of new rules.
As always, if you need more information or assistance in any of these areas, ECS is here to help!