The OverRuled: BIS Export Controls Module has been updated with the following actions:
- 13 Jun 2024 - Sapphire Havacilik San Ltd. STI - Denial Order; USD $285,000
On June 13, 2024, BIS issued a Temporary Denial Order against Sapphire Havacilik San Ltd. STI (the “Respondent”) for a period of 2 years in relation to violations of 15 C.F.R. §§ 740.15, 746.8 and 766.24. Specifically, the Respondents sought to procure shipment of various U.S. origin commodities, including Gulfstream aircraft classified under Export Control Classification Number (ECCN) 9A991 to Russia. BIS also imposed a civil penalty in the amount of $285,000.
The OverRuled: Russia Trade Controls Resource Center has been updated with the following actions:
- 12 Jun 2024 (OFAC):
The U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") and the U.S. Department of State designated over 300 individuals and entities, and identified 7 vessels as blocked property, pursuant to Executive Order ("E.O.") 14024. The designations target Russia's military-industrial base, financial infrastructure, and energy sector, as well as companies and individuals in third countries, such as the British Virgin Islands, Bulgaria, Kazakhstan, the Kyrgyz Republic, China, Serbia, South Africa, Türkiye, and the United Arab Emirates, that help Russia evade sanctions allowing Russia to move money and other valuable goods and assets to sustain its war effort.
Concurrent with these designations, OFAC issued General License ("GL") 8J, 98, 99, and 100, all of which authorize, subject to certain conditions, certain activities involving certain entities blocked on June 12, 2024.
Concurrent with these designation actions, OFAC also issued a "determination" (the "IT and Software Services Determination") pursuant to sections 1(a)(ii), 1(b), and 5 of E.O. 14071, prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of IT consultancy and design services or of IT support services or cloud-based services for enterprise management software and design and manufacturing software to any person located in the Russian Federation. This is effective as of September 12, 2024.
Concurrent with the IT and Software Services Determination, OFAC issued amended GLs 6D and 25D both of which authorize certain activities otherwise prohibited by the IT and Software Services Determination, though OFAC significantly narrowed the scope of GL 25 as it relates to the exportation of hardware, software and technology to Russia.
Additionally, OFAC expanded the scope of the definition of "Russia’s military-industrial base" to include all persons blocked pursuant to E.O. 14024, as well as "any person operating in the technology, defense and related materiel, construction, aerospace, and manufacturing sectors of the Russian Federation economy." "Russia’s military-industrial base" may also include individuals and entities that support the sale, supply, or transfer, directly or indirectly, of critical items identified pursuant to subsection 11(a)(ii) of E.O. 14024 to the Russian Federation.
Concurrent with the expanded scope of OFAC's definition of "Russia’s military-industrial base", OFAC issued an updated Compliance Advisory for foreign financial institutions on OFAC’s sanctions authorities targeting support to Russia's military-industrial base.
In total, OFAC issued eight new FAQs (1181-1188) and amended ten existing FAQs (976, 1040, 1068, 1122, 1128, 1146, 1147, 1148, 1151, 1152) related to the scope of the IT and Software Services Determination and OFAC's expanded definition of "Russia's military-industrial base."
- 12 Jun 2024 (UK):
The Office of Financial Sanctions Implementation ("OFSI") published new guidance in respect of OFSI's policy on licensing personal staff payments. The guidance sets out the circumstances under which OFSI may, or may not, license payments for the personal staff of UK designated persons ("DPs").
- 12 Jun 2024 (BIS):
The U.S. Department of Justice (”DOJ”) announced that Sergey Nefedov and Mark Shumovich, two Russian-born U.S. citizens, were arrested for allegedly operating a scheme to illegally export nearly half a million dollars’ worth of snowmachines and associated parts from the United States to Russia in violation of U.S. export controls imposed on certain luxury goods.
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