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The Export Control Update Newsletter
July 2008

CONTENTS

  1. North Korea: US Restrictions Are NOT Changed by the Change
  2. OFAC Updates Regulations to Reflect New IEEPA Penalties
  3. US Removes China Great Wall Industry Corp from Prohibited Parties List
  4. Attempted Aircraft Reexport to Iran Lands Iran Air, Galaxy Aviation Trade, and Ankair on US Denial List
  5. License Exception GFT: Can You Hear Me Now from Havana?
  6. BIS Makes Changes to What Requires a License
  7. CEO of Cirrus Electronics Gets 35 Months in Jail
  8. "Exporter of the Year" Exported Sarin Gas Precursor Without License
  9. Men Get Indicted for Exports of Military Aircraft Parts to Iran
  10. WaveLab Gives up $100,000 for Illegal Exports of Power Amplifiers to China
  11. DDTC Posts New Agreement Guidelines
  12. Omega Engineering Exports after Its License is Denied (Duhh!) then Rats on Illegal Exporter to Iran
  13. Senate Approves Chris Wall As Assistant Secretary of Commerce
  14. President Relaxes Some China ITAR Policies for Beijing Olympics
  15. Boeing Voluntary Disclosure on ITAR Agreement Administration Nets $3 Million Penalty
  16. AP Hypes US Exports to Iran
  17. Mother Jones Magazine Writes about US-Iran Trade Issues
  18. DDTC Posts Frequently Asked Questions (and Today’s Answers)
  19. OFAC Notices on Its Iraq Sanctions
  20. BIS Changes EAR Related to Chemical/Biological Weapons Based Controls
  21. Older stories are in the Export Control Update newsletter archive

1. North Korea: US Restrictions Are NOT Changed by the Change

The President lifted the TWEA (Trading With Enemy Act) Sanctions on North Korea on June 27, 2008 after North Korea gave Chinese officials in Beijing 60 pages of documentation of its nuclear past after continued negotiations. Unfortunately for exporters and reexporters, the full scope of US export and reexport controls remain in force.

The document declares far less nuclear weaponry than the country actually houses, but Bush felt that North Korea should be rewarded for its efforts, as this is seen as a positive step in negotiations for the future of denuclearization of the Korean peninsula.

North Korea will be taken off the State Department list of nations that sponsor terrorism, but all other sanctions will remain in place. This means that all property and interests in property that were blocked are still blocked and will remain blocked. All current restrictions on imports, exports and North Korean blocked funds held by US financial institutions will continue indefinitely. The restrictions will continue until North Korea cooperates completely and gives up all of its nuclear weapons and information.

So, in a nutshell, in terms of export and reexport controls. nothing has changed, except the fact that North Korea is no longer on the list of State Sponsors of Terrorism. All prior restrictions apply, even though, “[North Korea] is no longer in the national interest of the United States.”

More information:

— Danielle McClellan

2. OFAC Updates Regulations to Reflect New IEEPA Penalties

OFAC published an amendment in the Federal Register this month to correspond with revised higher penalties from IEEPA (International Emergency Economic Powers Act). The current maximum civil penalty is the greater of $250,000 or twice the amount of the transaction that is the basis of the violation.

These amendments are merely technical changes to the regulations in light of the large increase in the civil penalty. The regulations will now cross reference IEEPA for maximum penalty amounts instead of specifying amounts in the regulations themselves, applicable penalties may be found at 50 U.S.C. 1705.

OFAC has indicated they will be publishing substantive revisions to the enforcement guidelines used to administer enforcement and civil penalty programs. The revisions continue to be in progress, but OFAC hopes to publish them in the near FUTURE.

More information:

— Danielle McClellan

3. US Removes China Great Wall Industry Corp from Prohibited Parties List

After having its assets frozen by the US for over 2 years, China Great Wall Industry Corp. (CGWIC) has been removed from the Specially Designated Nationals list. The company and its US subsidiary, G.W. Aerospace were added to the list on June 13, 2006 after the Treasury Department sanctioned the company for providing missile guidance technology to Iranian programs.

The Chinese government owned company had all of its funds held in US banks frozen and all property blocked. At the time of the freeze, CGWIC argued that the sanction was, “the action to give US companies an advantage over the Chinese.” The company strongly demanded that the US government make correction to its wrong action days after the being added to the SDN list.

A few years later, the company whistles another tune, after feeling the wrath of the sanction the company began extensive training and communications regarding non-proliferation issues, and enhanced their internal control processes to ensure they are not involved in any dealings with proliferation risk countries. Because of their strong approach to become compliant, the sanction will be lifted. OFAC director Adam J. Szubin, explained, “A company that once supported Iran’s missile program has implemented a rigorous and thorough compliance program to prevent future dealings with Iran, [CGWIC] marks a great success for our counter-proliferation sanctions program.”

It is noted that the department will continue to monitor the company’s actions.

More information:

— Danielle McClellan

4. Attempted Aircraft Reexport to Iran Lands Iran Air, Galaxy Aviation Trade, and Ankair on US Denial List

BIS has issued a denial order suspending export privileges of Galaxy Aviation Trade Company, and three of its shareholders. The London Based company planned to purchase the 747 from Ankair, a Turkish company who would then re-export the US-origin Boeing 747 to Iran. Iran Air, who was to acquire the aircraft, has been issued a denial order and Ankair has been issued a non-standard denial.

Because the aircraft was of US-origin, it is an EAR violation to re-export it, and because the US government maintains strong economic sanctions on Iran, reexporting the Boeing was illegal on many grounds.

Under this denial order, Galaxy Aviation Trade Company and Iran may not directly/indirectly participate in or benefit in any way from any transaction subject to the EAR. Ankair may not participate in or benefit from any transactions involving the Boeing 747 at issue. It is also an EAR violation for any person to participate in a transaction subject to the EAR involving a denied party.

More information:

BIS has suspended Galaxy Aviation Trade Company Ltd., its principal shareholders, Iran Air and Ankair from Export transactions for a period of 180 days beginning June 6, 2008. Evidence was found that Galaxy Aviation Trade Company Ltd. was preparing to purchase a Boeing 747 from Ankair, an aviation company in Turkey. The plane was going to be immediately re- exported to Iran Air without a license.

More information:

—Danielle McClellan

5. License Exception GFT: Can You Hear Me Now from Havana?

BIS has revised a license exception in the Export Administration Regulations which will allow individuals to export mobile phones as gifts to eligible recipients in Cuba. The change was brought about because BIS feels that this will provide support for individuals to sustain democracy-building efforts for Cuba by allowing Cuban citizens to have contact with persons in other countries. The president announced that this will support, “Cubans who work to make their nation democratic and prosperous and just.”

The terms of License Exception Gift Parcels and Humanitarian Donations (GFT) will now allow mobile phones and related software, batteries, memory cards, chargers, and other accessories for mobile phones to be included under gift parcels. The value on gift parcels has also increased from $200 to $400; this will allow donors to still send medicines and medical supplies along with the mobile phone and accessories without having to make any reductions in the quantities of other supplies in the gift parcel.

Any persons holding current licenses will be authorized to export mobile phones and their accessories under the gift parcel license exception. The General Order will not increase the total value of exports or extend any expiration of any previously issued licenses. The rule is effective June 13, 2008.

More information:

—Danielle McClellan

6. BIS Makes Changes to What Requires a License

BIS is amending the Export Administration Regulations to reflect changes made the Missile Technology Control Regime (MTCR). MTCR is an export control arrangement of 34 nations that share the goal of stemming the flow of missile systems capable of delivering weapons of mass destruction. The regime was originally created to prevent the spread of missiles capable of nuclear warheads, but as times and technology have changed, they have expanded their mission. Members voluntarily pledge to adopt the regime’s export Guidelines and restrict export of items contained in the regime’s Annex. The MTCR controls both military and dual-use items.

MTCR met and made changes to the Annex in November 2007. BIS is now amending the EAR to coincide with those modifications. Here are the changes:

  • Section 772.1 (Definition of Terms) changes the terms of the definition of “payload”. Under (e); Other UAVs-“Payload” includes: will now include munitions supporting structures and deployment mechanisms.

The CCL will also be affected by changes to the MTCR Annex:

  • ECCN 1C111 paragraph (b) is amended by adding additional text to clarify the scope on the materials;
    • b.1 will now state that CTPB also includes carboxyl-terminated polybutadiene
    • b.2 will now include that HTPB includes hydroxyl-terminated polybutadiene.
  • ECCN 1C116 is amended by adding text to the heading; the description of Maraging steels will now include precipitates to produce strengthening and age-hardening of the alloy
  • ECCN 2B116 paragraph (a) will be changed slightly by merely replacing “and” with “while”

BIS expects that these amendments will have minimal if any impact on license applications.

BIS expects the following to cause an increase in license applications, so pay attention:

  • · ECCN 9B106 heading will now read “Environmental chambers usable for rockets, missiles, or unmanned aerial vehicles capable of achieving a ”range” equal to or greater than 300km and their subsystems, as follows (see List of Items Controlled)”
    • paragraph (a) will be changed to include a technical note that includes controls on environmental chambers that are capable of incorporating shaker units or vibration test equipment, even if the shaker units or vibration test equipment are not included at the time of export.
    • a.1 will be removed and a.2 will be designated as the new a.1
    • a.2 will be an entirely new paragraph that will include a new control parameter

Prior to the change you could export shaker units or vibration test equipment without them being subject to an MT control when they were exported separately from the environmental chambers.

There is a savings clause that will allow exports or reexports in route, including those on docks for loading to proceed to their destinations under previous eligibility if they would be affected by the amendments above as long as they are exported or reexported before midnight, July 16, 2008. As of midnight, July 16, 2008 a license will be required in accordance with this rule.

More information:

— Danielle McClellan

7. CEO of Cirrus Electronics Gets 35 Months in Jail

Parthasarathy Sudarshan, Cirrus Electronics CEO was sentenced to 35 months in prison for his involvement in illegal exports to India. In March of this year he pled guilty to felony charges of conspiracy to violate the International Emergency Economic Act (IEEPA), EAR, Arms Export Controls Act, and the ITAR.

Sudarshan and other employees at Cirrus Electronics exported items to Vikram Sarabhai Space Centre (VSSC), an enterprise within the Department of Space of the Government of India, and Bharat Dynamics, Ltd. (BDL), within the Ministry of Defense of the Government of India. Both companies are on the Department of Commerce’s Entity List, any exports of U.S. origin commodities are restricted and require a license, which was never acquired. The company also exported over 500 microprocessors for the Teja’s, a fighter jet in development in India, to the Aeronautical Development Establishment, yet another enterprise within the Ministry of Defense of the Government of India. The microprocessors are on the U.S. munitions list and require a license, which, with no surprise, was never obtained.

Cirrus provided US companies with fraudulent certificates that showed the end-user to the electrical components going to non-restricted entities in India. The company would send the products from its South Carolina facility to its Singapore facility and would then resend the packages to India to further conceal the illegal exports.

More information:

— Danielle McClellan

8. "Exporter of the Year" Exported Sarin Gas Precursor Without License

Miami-based Andes Chemical Corp., which exports a variety of chemicals to the Caribbean as well as to Central and South America, was earlier this year named “Exporter of the Year” in the “Materials” Category by Commercial News USA, the “official export promotion magazine of the U.S. Department of Commerce.” Not very long after that, Andes entered into a settlement agreement (PDF) with the Department of Commerce’s Bureau of Industry and Security (“BIS”) pursuant to which Andes admitted that it had exported sodium bifluoride, a precursor of sarin gas, to Jamaica without a license. Andes further agreed to pay a $60,000 for the six unlicensed shipments which occurred between May 2003 and July 2007. The company voluntarily disclosed the violations to BIS.

Sodium bifluoride is used as a souring agent by commercial laundries, in various sanitation and cleaning applications, and for tin plating and zinc galvanizing. And it can be used as the source of the fluorine atom in sarin and all other G-type nerve agents except tabun.

The chemical is categorized as ECCN 1C350.d.16 (PDF) and it is clearly listed in the index to the Commerce Control List (PDF).It doesn’t take any specialized knowledge in chemical engineering to parse the CCL and the ECCN involved. So the only explanation for the failure to procure a license is that the company never even bothered to determine the export status of sodium bifluoride before exporting it.

The press release announcing the award to Andes states:

Winners were chosen based on the total number of documented export deals completed in 2006, total percentage increase in sales in 2006 compared to 2005, exports as percentage of total sales, the company’s commitment to exporting, the company’s commitment to customer service, and the company’s innovation and originality in marketing products or services.

Oddly, among the many factors considered in making the award, compliance with export laws and regulations is not among them, which explains how the company could be exporting a nerve gas precursor without a license and still be “Exporter of the Year.” Perhaps export compliance should be a factor considered by the Commerce Department when it makes the awards for 2009.

Source:

— R. Clifton Burns, Esq, Powell Goldstein LLP

9. Men Get Indicted for Exports of Military Aircraft Parts to Iran

Hassan Saied Keshari, owner of Kesh Air International and Traian Bujduveanu, owner of Orion Aviation Corp, both face up to 20 years in prison and fines up to $1 million. The two men, Keshari from California and Florida resident Bujduveanu were indicted for their purchasing and selling US aircraft parts to Iran on numerous occasions.

Records indicate that Keshari would receive email orders from buyers in Iran, he would then request quotes from Bujduveanu and the two worked together to send the shipment to a company in Dubai who would then forward the parts to Iran. Overtime the pair shipped US parts for the CH-53 military helicopter, the F-14 Tomcat fighter jet, and the AH-1 attack helicopter, all notoriously used by the Iran military.

Because all parts were manufactured in the US they are designated as “defense articles” on the US munitions list requiring any exports to be licensed, especially to Iran. Keshari and Bujduveanu have been indicted on 11 counts of violating the International Emergency Economic Powers Act (IEEPA), the United States Iran Embargo, and the Arms Export Control Act. The charges are as follows:

  • Charge 1: Conspiracy to export goods to Iran
  • Charges 2 through 7: Exporting military aircraft parts from the US to Iran
  • Charges 8 through 9: Exporting defense articles from the US to Iran by way of Dubai, United Arab Emirates
  • Charge 10: Making false statements by misrepresenting the contents of a package containing military aircraft parts being exported from the US

More information:

— Danielle McClellan

10. WaveLab Gives up $100,000 for Illegal Exports of Power Amplifiers to China

WaveLab, Inc. of Virginia was sentenced to one year supervised probation and fined $15,000 along with a forfeiture of $85,000 in profits that the company had made on the illegal exports. The company willfully admitted that it exported more than 2,400 power amplifiers to the People’s Republic of China without obtaining licenses.

The power amplifiers are used for satellite communication of data, voice, and video signals, as well as in wireless data communications. The amplifiers contained military applications and were controlled for national security reasons under the CCL.

More information:

— Danielle McClellan

11.  DDTC Posts New Agreement Guidelines

DDTC has published its 144-page Word document “Technical Assistance Agreements Manufacturing License Agreements And Warehouse and Distribution Agreements”.

The document is available for download from DDTC:

We hope to have a detailed analysis of the new guidelines next month.

— Danielle McClellan

12.  Omega Engineering Exports after Its License is Denied (Duhh!) then Rats on Illegal Exporter to Iran

In 2003 Omega Engineering Incorporated of Connecticut was charged with 18 violations by BIS. In April 1997 the company attempted to get a license to export laboratory equipment including load cells, load bolts, strain gauges and related parts to Pakistan. The export license was denied; Omega appealed the denial, which was eventually rejected. Then Omega exported the items anyway, and got caught.

Beginning in June 2007 the company sent the laboratory equipment to Newport, Germany where it was then shipped to Pakistan with Omega’s full knowledge. Charges 1-17 are all violations of false statements on Shipper’s Export Declarations, Omega filed SED’s filing that Germany was the ultimate destination when it knew that Pakistan was the actual ultimate destination. The final charge was a violation of 764.2(e), the company acted with knowledge that they were committing a violation when they continued to export the goods after their export license was denied.

BIS prohibited Omega from participating in any transactions involving exports from the US to Pakistan and any items or activities subject to the Regulations that involved Pakistan for a period of 5 years beginning on November 12, 2003.

Recently the company cooperated with BIS in a criminal investigation that prosecuted an individual attempting to export US origin goods to Iran. Their cooperation enabled BIS to obtain evidence that they would not have otherwise been able to access, allowing them to successfully indict the individual.

Because of Omega’s “extraordinary cooperation” the original denial period of 5 years has been waived, beginning on June 20, 2008 the company’s export privileges are reinstated.

More information:

Note from John Black: Illegally exporting items after your license is denied is near the top of my list of violations not to make. The US Government often suspects that if it denies a license, the company will export anyway, so the government often will watch companies who have had licenses denied. But, at the top of my list of mitigating factors is if you get nailed for a Pakistan violation, give the government information on somebody illegally exporting to Iran.

— Danielle McClellan

13. Senate Approves Chris Wall As Assistant Secretary of Commerce

The Senate Banking Committee approved Christopher R. Wall as Assistant Secretary of Commerce for Export Administration. The position has been vacant since late 2007 when Christopher A. Padilla began to serve as Undersecretary of Commerce for International Trade.

Chris is one of the nicest guys you will ever meet as well as being a leading expert in the export control field. Too bad his appointment will likely only last until the new US President is inaugurated.

More information:

— John Black

14. President Relaxes Some China ITAR Policies for Beijing Olympics

The president has issued a letter to the House permitting temporary exports to the People’s Republic of China for the Beijing Olympic Games. The restrictions will pertain only to firearms and related items for use by US and non-US athletes competing in shooting events, and military gyroscopes that are embedded in mobile high definition television camera systems for use by US filming crews.

Licensing requirements will remain in place for these exports and will require review and approval on a case-by-case basis. All equipment will be returned to the US following the end of the games.

More information:

— Danielle McClellan

15. Boeing Voluntary Disclosure on ITAR Agreement Administration Nets $3 Million Penalty

John Black’s Advice to Export Administrators: This is a story about violations that most ITAR exporters make. Read it, be thankful it wasn’t your company that got nailed, and use this information to motivate your company to improve its ITAR agreement administration. Sure, the dollar values and quantities related to the Boeing agreements might be higher than what you do under your agreements, but the lesson is still there.

The Boeing Company has been fined $3 million for 40 violations of the AECA and ITAR that they voluntarily disclosed to DDTC. In the charging letter it is said that the voluntary disclosure was taken into account, however Boeing’s “record in effectively administering, updating and reviewing its agreements has been consistently flawed”.

The company was charged 20 times for violations of the terms of the company’s manufacturing licensing agreements (MLA). Over the course of about 15 years Boeing manufactured hardware in excess of the approved amounts of its MLA. At various points in time Boeing’s unauthorized manufacture amounted to more than $4 billion worth of hardware when it was only authorized at most $100 million. Large amounts of unapproved manufacturing continued from 1999 well into 2006.

Boeing did not request approvals for MLA amendments for the excess amounts of manufacturing that occurred on a continuous basis. Of the few approval amendments the company did submit they failed to show the actual value they had already manufactured. When they disclosed the 20 MLA violations DDTC charged Boeing with an additional 10 violations for failing submit for approval amendments. DDTC also charged them with 5 violations of omitting material facts about the values of the agreements that they did submit.

Boeing was also hit with an additional 5 violations for failing to keep track of their executed agreements and amendments that had been submitted to DDTC, failing to submit non-Transfer and Use Certificates and the list goes on for clerical mishaps.

The charging letter states that, “if the Respondent [Boeing] had not undertaken these actions [voluntary self disclosure], charges against and penalties imposed upon the Respondent would likely be more significant.”

More information:

DDTC’s Charging Letter (PDF)

— Danielle McClellan

16. AP Hypes US Exports to Iran

The Associated Press recently outlined seven years of US government trade data and announced that the value of US exports to Iran has rose from close to $8 million in 2001 to nearly $150 million last year. Despite the only exceptions for exports being agricultural, medical and humanitarian it seems that cigarettes, bull semen, bras, golf carts, fur clothing, sculptures, perfume and musical instruments all fall under “humanitarian” exceptions.

What’s worse is that the sanctions we put on Iran are suppose to irritate their military efforts, but somehow they have received at least $13,000 in “aircraft launching gear and/or deck arrestors”. Although this seems like a small amount, it actually is far from it. Older military items are often sold for near pennies. Before Bush signed legislation prohibiting the Pentagon from selling leftover F-14 parts, they would sell the parts that once costs the US roughly $38 million, and would now sell them for around $2,000 to $4,000 to domestic buyers.

Adam Szubin, director of OFAC explains that, “it is unlikely exports of military gear occurred,” but added that, “the government is looking into it after the AP raised questions, [shipping records] are subject to human error, such as citing wrong commodity codes or recording ‘Iran’ as the destination rather than ‘Iraq’. In many cases US sanctions do allow shipments of aircraft parts for safety upgrades for Iran’s commercial passenger jets.

The US counted more than $1 trillion in world exports last year alone, so what is $146 million worth of exports to Iran really hurting anyone. Apparently, many believe it is, Barack Obama criticized the Bush administration (very surprising to me) for, “increased exports to Iran despite tough talk about its nuclear ambitions and meddling in Iraq.” Undersecretary of State, William Burns replied by explaining that, “the US government’s quarrel is with the government of Iran, not with its people, and the US shipments account for a tiny fraction of Iran’s total imports” and the administration is, “committed fully to using all diplomatic tools in dealing with Iran, and the use of force also remains on the table as a last resort.”

Top US exports to Iran over Bush’s years in office:

  1. Cigarettes $73 million
  2. Corn $68 million
  3. Chemical wood pulp/soda or sulfate $64 million
  4. Soybeans $43 million
  5. Medical equipment $27 million
  6. Vitamins $18 million
  7. Bull semen $12.6 million
  8. Vegetable seeds $12 million

More information:

Comment from John Black: Would it make me King of the Export Compliance Nerds if I got a license to ship Cuban cigars to Iran?

— Danielle McClellan

17. Mother Jones Magazine Writes about US-Iran Trade Issues

Who would have ever thought: export controls in Mother Jones? Here is a summary of what Mother Jones had to say:

The latest statistics on US arms sales to Iran is beginning to raise a lot of eyebrows and questions. Investigators at the US bureau of Immigration and Customs Enforcement (ICE) have some answers to the numerous questions but even the answers seem to raise even more questions.

We are told by the Department of Homeland Security that dealers around the world are recruiting US military and intelligence officials to assist them in exporting restricted military commodities to neutral third countries-when they know the final destination will be a sanctioned country, such as Iran.

Last year The Justice Department appointed Steven W. Pelak to serve as the first-ever National Export Control Coordinator. The position was created as a stepping stone for getting a hold of the export problem at hand. In essence, Pelak will be a US attorney that will only try US export cases.

Records indicate that 108 nations were involved in collection efforts against sensitive US technologies in 2005 and the number is increasing. The Attorney General describes, “the threat posed by illegal exports of controlled US technology is substantial”.

Many officials including current and former US government officials, CIA and attorneys specialized in export control and trade law all agree that there are numerous reasons the US is vulnerable regarding illegal sales, and why the problem continues. The major issue at hand seems to be that The Treasury Department in charge of US sanctions and OFAC have next to no staff to conduct investigations. Pelak may be specialized in trying export cases but if no one can conduct an investigation there really won’t be any cases.

Another issue the US faces is the fact that Iran is generating money from the incredibly high oil prices, sanctions can’t even come close to putting a dent in those funds. The US is the biggest arms seller in the world, with so many countries and customers, some having close trade ties with Iran; it’s inevitable that some arms will end up in Iran. With Dubai being a free trade zone and located between the Middle East, Africa, and India, the US uses its port to ship the many arms. It’s easy for legal and illegal companies to obtain US arms from the port. Although the UAE adopted a new national security export law limit the sale of sensitive US technology to Iran, it seems to have little effect. Thousands of Iranian’s still do business with UAE even with the new law intact. This leaves the burden on US companies to make sure that when they export any military items they KNOW the final destination.

Some say that the blame cannot completely fall on the trade port, a former US Commerce official explains, “US bureaucrats don’t want to find their names in press for not enforcing when a US soldier is killed [in Iraq] by US technology that was exported to Iran through UAE. So, the rhetoric is very tough for UAE enforcement, On the other hand, we desperately want the oil dollars…So, mixed messages galore.”

So, who is to blame for US military technology falling into the hands of Iranians? Statistics show that Iran’s overall trade with the world has grown since the US sanctioned the country. Is it merely the usual black list market or is a secret government deal like the Iran-Contra scheme of the past? Patrick Clawson, an Iran policy expert says, I don’t see the indications of that happening [grand bargain with Iran].”

More information:

— Danielle McClellan

18. DDTC Posts Frequently Asked Questions (and Today's Answers)

DDTC has posted several FAQ’s on their website:

— Danielle McClellan

19. OFAC Notices on Its Iraq Sanctions

OFAC has posted guidance and legal sources pertaining to Iraq Sanctions on their website. These sanctions apply to all US persons, companies, non- profit groups, and government agencies, simply put EVERYONE.

The site offers guidance by offering copies of applications for the Release of Blocked Funds and general licenses. Several Adobe PDF documents can be found under “Interpretive Guidance” which offers a little more insight for the savvy.

— Danielle McClellan

20. BIS Changes EAR Related to Chemical/Biological Weapons Based Controls

BIS published a final rule in the Federal Register on July 8, 2008 amending the Export Administration Regulations (EAR), the Commerce Control List (CCL) and the list of countries that currently are States Parties to the CWC.

The Australia Group, consisting of 40 countries that work to maintain export controls on a list of chemicals, biological agents and related equipment and technology used in chemical or biological weapons programs. In April 2008 the Australia Group met and agreed upon revisions to the above mentioned documents. The changes are as follows:

  • CCL: ECCN 1C352 paragraph (a) is amended by replacing the following descriptions with the new HPAI language currently used by the World Organization for Animal Health (OIE);
    • a.2.a will now state, AI viruses that have an intravenous pathogenicity index (IVPI) in 6- week-old chickens greater than 1.2; or
    • a.2.b. will be added and state, AI viruses that cause at least 75% mortality in 4- to 8- week-old chickens infected intravenously.
  • EAR:Part 745.1 paragraph (a) is amended to update the fax number and address for submitting advance notification and annual report requirements for exports of Chemical Weapons Convention (CWC);
    • (2) will now read: Send the notification either by fax to (202) 482-1731 or by mail or courier delivery to the following address: Information Technology Team, Treaty Compliance Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 4515, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230. Attn: “Advance Notification of Schedule 1 Chemical Export”.
    • (3) will now state: Submit a copy of the end-Use Certificate, no later than 7 days after the date of export, either by fax to (202) 482-1731 or by mail or courier delivery to the following address: Information Technology Team, Treaty Compliance Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 4515, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230. Attn: “CWC End-Use Certificate Report”.
  • EAR: Supplement No. 2 to Part 745 is amended to now read “List of States Parties as of July 1, 2008”; and by adding in alphabetical order, the countries “Congo (Republic of the)” and “Guinea-Bissau”.

More information:

— Danielle McClellan

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