Balkans

While most college-age Australians have nothing more to remember their birthdays than hangovers and bad sunburns, a rather more sober Australian twenty-year-old recently celebrated its first twenty years stemming the spread of chemical and biological weapons. I am speaking of course of the Australia Group, the informal multilateral export control regime which returned to its place of birth earlier this year for its twentieth annual plenary session. Speaking at the plenary, Australian Foreign Minister Alexander Downer recounted a bit of the organization’s history:

It is 20 years since Australia convened the first meeting of 15 like-minded countries in 1985 in Brussels.

That meeting was a response to the findings of a UN investigation, led by an Australian - Dr Peter Dunn, that Iraq had used chemical weapons in the Iran-Iraq war. It posed the question of how to prevent Iraq from acquiring materials for the production of chemical weapons through otherwise legitimate commercial trade.

The response - a proposal to harmonize national export controls - was endorsed by all present at that meeting, and the Australia Group was born.

But the plenary wasn’t all talk with the AG participants agreeing on three control list changes to refine limits on illegitimate trade in items with chemical or biological weapons end uses:

1. Simplification of the types of pumps subject to controls due to their usefulness in manufacturing chemical weapons (the US controls such equipment under ECCN 2B350.i).
2. New controls on spraying or fogging systems designed for use with aircraft or unmanned aerial vehicles (UAVs) and capable of delivering droplets of less than 50 m in diameter at a rate of greater than 2 liters per minute (ECCN 2B352).
3. A revision to the technical note clarifying that the controls applicable to genetic elements and genetically-modified organisms also cover nucleic acid sequences that represent a significant hazard to human, animal or plant health or enhance the ability of AG-controlled or other microorganisms to cause harm. (This change in particular has potentially significant implications for firms and universities involved in biotechnology research. The revised technical note can be found under ECCN 1C353).

It may have taken nearly four months, but the US Bureau of Industry and Security did finally turn up with a gift in honor of the AG’s first twenty years on August 5 - a regulation implementing the group’s new rules. In addition to the control list and technical note revisions explained above, the BIS rule updates the Export Administration Regulations to reflect a new AG participant (Ukraine), the fact that the tiny Pacific island nation of Niue has acceded to the Chemical Weapons Convention, and a new name for the largest part of the former Yugoslavia (Serbia and Montenegro).

On July 15, the Bureau of Industry and Security published a massive final rule implementing the decisions made at the December 2004 plenary meeting of the Wassenaar Arrangement. Other Wassenaar participants have already taken similar steps to codify the group’s changes at a national level or will do so in the near future. In addition to the Wassenaar-conforming revisions to Commerce Control List Categories 1-9, BIS also took this opportunity to add or expand some unilateral US controls.

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On March 10 the Department of Commerce, Bureau of Industry and Security (BIS) revised the Export Administration Regulations to reflect a number of changes with respect to missile controls resulting from the October, 2004 plenary meeting of the Missile Technology Control Regime (MTCR).

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In a Notice Dated May 14, 2003, the White House issued a Presidential Determination stating, “furnishing of defense articles and services to Serbia and Montenegro will strengthen the security of the United States and promote world peace.” Crack export compliance consultants have determined this to mean that Serbia and Montenegro are no longer 126.1 ITAR proscribed countries. That means that licenses have a chance of approval and that you can use whatever scarce exemptions may be available.

BIS finally lifted the last remnants of the arms embargo to Yugoslavia on November 25. The primary aerospace impact of the regulatory change is to make complete aircraft classified as 9A991.a NLR eligible to Yugoslavia. Up until the notice, complete commercial aircraft still required an export license to Yugoslavia, even though commercial aircraft parts did not.

The rule change also lifts licensing requirements on a variety of other ECCN’s, a few of which may be of interest to the aerospace community, such as 6A003.b.3 imaging cameras and 6A002 optical sensors. There’s more good news for those of you who enjoy mounting 0A989 water cannons on your aircraft. They too are now NLR to Yugoslavia.

In the May 30, 2002 Federal Register the Office of Foreign Assets Control published new “Western Balkans Transactions Regulations,” 31 CFR Part 588. The new regulations implement Executive Order 13219 of June 26, 2001. Both the Executive Order and the regulations block the property of those entities who are involved in violence or other destabilizing activities in the Western Balkans or obstructing the implementation of the Dayton Accords for Bosnia. The new regulations clarify the Western Balkans sanctions that OFAC implemented last June and do not include any significant new issues. The sanctions focus on the Western Balkans entities that OFAC has included on its Specially Designated Nationals Lists.

In the January 9, 2002 Federal Register, the Office of Defense Trade Controls (ODTC) amended the International Traffic in Arms Regulations by removing Tajikistan and the Federal Republic of Yugoslavia (Serbia and Montenegro) from the list of proscribed countries in section 126.1 of the ITAR. This means it is no longer ODTC policy to deny licenses and agreements for these two countries and you may use license exemptions for these two countries. It also means that you no longer need ODTC approval for sending proposals (unless, of course, the proposals contain controlled technical data or the proposals are the type that require prior approval or notice for non-proscribed countries). ODTC also amended the ITAR to change the proscribed country “Zaire” to “the Democratic Republic of the Congo (formerly Zaire)”.

The proscribed countries are: Afghanistan, Armenia, Azerbaijan, Belarus, Cuba, Iran, Iraq, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Rwanda, Somalia, Sudan and Democratic Republic of the Congo.

President Bush issued Executive Order 13219 in the June 29, 2001 Federal Register that imposes sanctions against a list of nearly 35 people and entities who is some manner threaten the peace in the Western Balkans. The sanctions block the assets of these listed individuals when those assets come into the United States or come into the possession or control of US persons.

In this executive order, “US person” includes any

• US citizen, permanent resident alien,
• entity organized under US law (including foreign branches but not foreign subsidiaries), and
• person in the United States.

US persons should immediately begin screening all activities against the names on these lists. Annex 1 at the end of this newsletter contains the list.

The Office of Foreign Assets Control in the Treasury Department is responsible for administering the sanctions against the listed entities.

(In a related matter, President Bush also issued Proclamation 7452 blocking the listed persons from entering the United States. )

In the March 1, 2001 Federal Register the Commerce Department published regulations ending the US embargo on exports and reexports of commercial items to Serbia. At the same time, the Commerce Department revised the Export Administration Regulations (”EAR”) to require a license for exports and reexports to certain individual and companies identified by the Treasury Department. The United States continues its arms embargo on the Federal Republic of Yugoslavia (”FRY”), which consists of the Republic of Serbia and the Republic of Montenegro. Because of the arms embargo, certain items on the EAR’s Commerce Control List are subject to special licensing requirements.

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In one of his last acts in office, President Clinton issued Executive Order 13192 “lifting and modifying” the US embargo on Serbia. As a practical matter, however, the US embargo on export and reexports to Serbia remains in place, despite Clinton’s executive order, which was published in the January 23, 2001 Federal Register. Until the US Department of Commerce revises the Export Administration Regulations (”EAR”), all items subject to the EAR continue to require a US license when destined for Serbia. Commerce has stated that it hopes that within a couple of weeks it will publish a revision to the EAR that will return Serbia to its pre-embargo status.

The primary immediate impact of the executive order is that it creates a new prohibited parties list consisting of former President Slobodan Milosevic and certain of his family, friends, supporters and business partners. See Annex 1 at the end of this newsletter for the new list of FYRM (Federal Republic of Yugoslavia-Milosevic) entities. The Treasury Department did not include the FYRM list in the Federal Register notice, but it did publish the list on its web page at http://www.treas.gov/ofac/.

What is the restriction on doing business with FYRMs? No “US person” may participate in or facilitate, directly or indirectly, any transaction involving any listed FYRM or any other entity owned or controlled by, or acting on behalf of, Milosevic or a listed entity. For the purpose of this restriction, “US Person” includes:

• Any person in the United States;
• Any US corporation and its foreign branches, but not its foreign subsidiaries; and
• Any US citizen or permanent resident.

Denied Persons List

In the January 22, 2001 Federal Register added the following person to its Denied Persons List:

Peter Rigolli, also known as Pietro Rigolli, Ian Falcon, G. Tedaldi, Rafael Heredia, and Farid H. Talab, currently incarcerated at: Inmate #044-22082, FCI Otisville, P.O. Box 600, Otisville, New York 10963; and with an address at: 118 Northview, Dollar Des, Ormeaux, Quebec, Canada H9B3J6

In March 2000 Rigolli was convicted of exporting aircraft and aircraft engine parts from the United States to Iran. In at least one case, he shipped the parts from the United States via Canada and Switzerland to Iran. In another case he stated the final destination of the parts was Singapore, when in fact the parts ended up in Iran.

This enforcement action is another clear reminder that aerospace companies always should be on the lookout for anything suspicious that may indicate you are involved in a transaction in which another party wishes to illegally transfer items to Iran. (Just last month we warned you about Iran’s aggressive program to acquire aircraft parts.)

Proliferation Sanctions

In the January 17, 2001 Federal Register the State Department published proliferation sanctions against:

Changgwang Sinyong Corporation (North Korea) and any successor, sub-unit, or subsidiary thereof

Under these sanctions, the US Government may not issue licenses for exports and reexports to this entity and the US Government may not provide assistance or enter into contracts with this entity.

OFAC List of Federal Republic of Yugoslavia-Milosevic Entities

ACIMOVIC, Slobodan, Assistant Director of Beogradska Banka; DOB 19 Sep 1951 (individual) [FRYM]
ALBUNOVIC, Veljko, General Manager of Pozarevacka Banka AD (individual) [FRYM]
BALTOVSKI, Mira, General Manager for International Operations of Beogradska Banka (individual) [FRYM]
BANOVIC, Nenad (ICTY indictee, Bosnian Serb); DOB 28 Oct 1969 (individual) [FRYM]
BANOVIC, Predrag (ICTY indictee, Bosnian Serb); DOB 28 Oct 1969 (individual) [FRYM]
BOROVNICA, Goran (ICTY indictee, Bosnian Serb); DOB 15 Aug 1965 (individual) [FRYM]
BOZOVIC, Radoman, ex-Managing Director of Genex; DOB 10 Jan 1953 (individual) [FRYM]
BUDISIN, Radmila, General Manager, Legal, BB Browncourt Trading; DOB 3 Mar 1944; POB Srobobran (individual) [FRYM]
BULATOVIC, Momir, Ex-Prime Minister, Federal Republic of Yugoslavia; DOB 21 Sep 1956 (individual) [FRYM]
CESIC, Ranko (ICTY indictee, Bosnian Serb); DOB 5 Sep 1964; POB Drvar (individual) [FRYM]
CVETANOVIC, Ninoslav, General Director, RUDARSKO; Executive of Bor Mining; DOB 1940 (individual) [FRYM]
DJAKOVIC, Milan, Director of NIS JUGOPETROL; DOB 5 Oct 1937 (individual) [FRYM]
FUSTAR, Dragan (ICTY indictee, Bosnian Serb); DOB 28 Mar 1956 (individual) [FRYM]
GAJIC-MILOSEVIC, Milica, daughter-in-law of Slobodan Milosevic; DOB 1970 (individual) [FRYM]
GALOVIC, Predrag, General Manager of Jugobanka AD; ex-Assistant Minister for the Economy, Federal Republic of Yugoslavia (individual) [FRYM]
GRUBAN, Momcilo (ICTY indictee, Bosnian Serb); 19 Jun 1961 (individual) [FRYM]
JANJIC, Stanisa, Director of JUMKO Holding; member of SPS Main Committee; DOB 10 Mar 1948 (individual) [FRYM]
JANKOVIC, Gojko (ICTY indictee, Bosnian Serb); DOB 31 Oct 1954 (individual) [FRYM]
JANKOVIC, Tomislav, President of Galenika Board (individual) [FRYM]
JOCIC, Vladislav, General Manager of Sabacka Banka AD (individual) [FRYM]
JOSIC, Milan, General Manager of Loznicka Banka AD (individual) [FRYM]
KARADZIC, Radovan (ICTY indictee, Bosnian Serb); DOB 19 Jun 1945; POB Petnica, Montenegro (individual) [FRYM]
KARIC, Palmira Bogoljub, Businessman; ex-Minister without Portfolio, Republic of Serbia; DOB 17 Jan 1954; POB Pec, Kosovo (individual) [FRYM]
KERTES, Mihail, Ex-Director of Customs, Federal Republic of Yugoslavia; DOB 29 Aug 1947; POB Palanka, Vojvodina, Serbia (individual) [FRYM]
KLIPA, Dusan, Director General of “ZORKA;” DOB 9 Apr 1943; POB Sabac (individual) [FRYM]
KNEZEVIC, Dusan (ICTY indictee, Bosnian Serb); DOB 23 Jun 1955; POB Orlovci (individual) [FRYM]
LUKIC, Milan (ICTY indictee, Bosnian Serb); DOB 6 Sep 1967; POB Foca, Bosnia-Herzegovina (individual) [FRYM]
LUKIC, Sredoje (ICTY indictee, Bosnian Serb); DOB 5 Apr 1961; POB Visegrad, Bosnia-Herzegovina (individual) [FRYM]
MALJKOVIC, Nebojsa, Member of JUL Directorate; ex-Deputy Prime Minister, Federal Republic of Yugoslavia; ex-Minister for Cooperation, Federal Republic of Yugoslavia; President of Dunav Insurance; DOB 4 Sep 1954 (individual) [FRYM]
MARINIC, Zoran (ICTY indictee, Bosnian Serb); DOB 6 Jun 1963; POB Busovaca (individual) [FRYM]
MARJANOVIC, Mirko, Ex-Prime Minister of Serbia; DOB 27 Jul 1937; POB Knin, Croatia (individual) [FRYM]
MARKOVIC, Mirjana, wife of Slobodan Milosevic; DOB 10 Jul 1942 (individual) [FRYM]
MARKOVIC, Momir, Private Banker; ex-Deputy Governor of National Bank of Yugoslavia; Editor of Velika Srbija (individual) [FRYM]
MARKOVIC, Radomir, Chief of Intelligence; head of RDB; DOB 1946 or 1947 (individual) [FRYM]
MARKOVIC, Vladimir, Member of JUL; General Director of Merima Chemical (individual) [FRYM]
MARKOVIC, Zoran, Executive Director of Beogradska Banka (individual) [FRYM]
MARTIC, Milan (ICTY indictee, Bosnian Serb); DOB 18 Nov 1954; POB Zagrovic (individual) [FRYM]
MEJAKIC, Zeljko (ICTY indictee, Bosnian Serb); DOB 2 Aug 1964; POB Petrov Gaj (individual) [FRYM]
MILACIC, Borislav, Minister of Finance, Republic of Serbia; DOB 13 May 1953 (individual) [FRYM]
MILANOVIC, Dafina, ex-President of Dafiment Bank (individual) [FRYM]
MILOSEVIC, Borislav, brother of Slobodan Milosevic; DOB 1936 (individual) [FRYM]
MILOSEVIC, Marija, daughter of Slobodan Milosevic; DOB 1965 (individual) [FRYM]
MILOSEVIC, Marko, son of Slobodan Milosevic; DOB 2 Jul 1974 (individual) [FRYM]
MILOSEVIC, Milanka, sister-in-law of Slobodan Milosevic (individual) [FRYM]
MILOSEVIC, Slobodan, Ex-President of Federal Republic of Yugoslavia (ICTY indictee); DOB 20 Aug 1941; POB Pozarevac, Serbia (individual) [FRYM]
MILUTINOVIC, Milan, President, Republic of Serbia (ICTY indictee); DOB 19 Dec 1942; POB Belgrade, Serbia (individual) [FRYM]
MITROVIC, Borislav, Ex-Secretary General, President’s Secretariat (individual) [FRYM]
MITROVIC, Zeljko, Owner of TV Pink; Member of JUL Directorate; DOB 31 May 1967 (individual) [FRYM]
MLADIC, Ratko (ICTY indictee, Bosnian Serb); DOB 12 Mar 1943; POB Bozinovici, Bosnia-Herzegovina (individual) [FRYM]
MRKSIC, Milan (ICTY indictee, Serb); DOB 20 Jul 1947 (individual) [FRYM]
OJDANIC, Dragoljub, Ex-Minister of Defense, Federal Republic of Yugoslavia (ICTY indictee); DOB 1 Jun 1941; POB Ravni, Cajetina (individual) [FRYM]
PAUNOVIC, Radisav, General Manager of Izvozna Banka AD (individual) [FRYM]
PAVKOVIC, Nebojsa, Chief of General Staff, Army; DOB 10 Apr 1946; POB Senjski Rudnik, Despotovac Municipality, Pozarevac, Serbia (individual) [FRYM]
PENEZIC, Branislav, General Manager of DUNAV Banka AD (individual) [FRYM]
PETROVIC, Radoje, General Manager for International Payments of Beogradska Banka (individual) [FRYM]
RADENKOVIC, Ljiljana, Anglo-Yugoslav Bank London; Antexol Trading Ltd., Cyprus (individual) [FRYM]
RADIC, Miroslav (ICTY indictee, Serb); DOB 1 Jan 1961 (individual) [FRYM]
RAHMAN, Pavle, General Manager for Funds and Liquidity of Beogradska Banka (individual) [FRYM]
RAJIC, Ivica (ICTY indictee, Bosnian Croat); DOB 5 May 1958; POB Johovac (individual) [FRYM]
RAKETIC, Srdjan, Director General of Privredna Banka Pancevo AD (individual) [FRYM]
RISTIC, Ljubisa, President of JUL; DOB 8 Feb 1947 (individual) [FRYM]
RISTIC, Milorad, Director General of Niska Banka AD (individual) [FRYM]
RODIC, Milan, Member of JUL Directorate; CEO Serbian Lumber Monopoly; DOB 11 Dec 1948 (individual) [FRYM]
SAINOVIC, Nikola, Ex-Deputy Prime Minister, Federal Republic of Yugoslavia (ICTY indictee); DOB 7 Dec 1948; POB Bor, Serbia (individual) [FRYM]
SEKULIC, Zarko, Director-General of Agrobanka AD (individual) [FRYM]
SIMANOVIC, Vojislav, General Manager of PKB; President of JUL Comm. for Agri.; DOB 23 Sep 1953 (individual) [FRYM]
SIMIC, Blagoje (ICTY indictee, Bosnian Serb); DOB 1 Jul 1960; POB Kruskovo Polje (individual) [FRYM]
SLIJIVANCANIN, Veselin (ICTY indictee, Serb); DOB 13 Jun 1953 (individual) [FRYM]
SOKOLOVACKI, Zivko, Member of JUL Directorate; Chairman of the Board, NIS (individual) [FRYM]
STANKOVIC, Radovan (ICTY indictee, Bosnian Serb); DOB 10 Mar 1969; POB Trebica (individual) [FRYM]
STANKOVIC, Srboljub, Director of NIS Naftagas; Member of JUL Directorate; DOB 1940 (individual) [FRYM]
STOJILJKOVIC, Vlajko, Ex-Minister of the Interior, Serbia (ICTY indictee); DOB 1937; POB Mala Krsna, Serbia (individual) [FRYM]
TOMASEVIC, Ljiljana, Executive Director of Beogradska Banka (individual) [FRYM]
TOMOVIC, Slobodan, SPS Regional head KRAGUJEVAC; ex-Minister of Energy, Federal Republic of Yugoslavia; Member of SPS Main Committee; DOB 1946 (individual) [FRYM]
UNKOVIC, Slobodan, Federal Republic of Yugoslavia Ambassador to China; DOB 1938 (individual) [FRYM]
VASILJEVIC, Jezdimir, Director of failed pyramid scheme based out of Jugoskandik Bank; DOB 1948 (individual) [FRYM]
VLATKOVIC, Dusan, Ex-Governor, NBJ, member of JUL; DOB 12 Feb 1938 (individual) [FRYM]
VUCIC, Borka, Minister for Cooperation with International Financial Institutions, Federal Republic of Yugoslavia; DOB 4 Apr 1926 (individual) [FRYM]
VUKOVIC, Slobodan, General Manager of PRVA Preduzetnicka Banka AD; DOB 2 Jan 1940 (individual) [FRYM]
ZECEVIC, Miodrag, Director of Jubmes Bank (individual) [FRYM]
ZELENOVIC, Dragan (ICTY indictee, Bosnian Serb); DOB 12 Feb 1961 (individual) [FRYM]