ICYMI: BIS Updates Boycott Requester List

The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the Boycott Requester List. The list notifies companies, freight forwarders, financial entities, and individuals of potential sources of boycott-related requests that they may receive.

Background on Boycott Requests

BIS is charged with enforcing anti-boycott laws under the Export Administration Regulations (EAR). The laws prohibit U.S. companies from taking actions in furtherance of a boycott maintained by a foreign country against a country friendly to the United States. Common boycott requests include:

  • Requesting a certification that goods are not from a specific country
  • Requesting that goods are not shipped to a certain country
  • Requesting that a business does not engage with a particular country

U.S. persons must report boycott-related requests to BIS’s Office of Anti-boycott Compliance (OAC).

Boycott Requester List

OAC maintains a boycott-requester list to raise awareness and assist U.S. persons in identifying sources of boycott-related requests.

Entities on the list have been reported by a U.S. person to BIS via a request report form. The list is updated quarterly but is not an exhaustive list of entities that may make these requests.

The most recent update to the list includes 57 additions and the removal of 127 entities.

Requesting countries added in the most recent update include:

  • Afghanistan
  • Algeria
  • Bangladesh
  • Germany
  • India
  • Iraq
  • Japan
  • Kuwait
  • Malaysia
  • Norway
  • Oman
  • Pakistan
  • Saudi Arabia
  • Singapore
  • Switzerland
  • United Arab Emirates
  • Qatar
  • Vietnam

Exporters have a duty to remain vigilant in spotting boycott-related requests and reporting them to BIS. Diaz Trade Law can help […]

By |2024-07-02T08:57:03-04:00July 2, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS)|Comments Off on ICYMI: BIS Updates Boycott Requester List

ICYMI: Congress Doubles the Statute of Limitations for Sanctions Violations

On April 24, 2024, President Biden signed into law H.R. 815, an emergency supplemental appropriations bill that included spending for Israel and Ukraine, along with other priorities such as data protection from foreign adversaries.

Within the fentanyl trafficking section, the bill included a provision that doubles the statute of limitations for all sanctions violations from five to 10 years. It also extended the limitation for certain export control violations such as biological weapon proliferation.

Impact

This policy change will change how exporters keep records, maintain compliance programs, and conduct due diligence. It also allows more time for the government to investigate violations.

Government

The Department of Justice and the Department of Treasury’s Office of Foreign Assets Control (OFAC) are the primary authorities that will benefit from this policy change. Agency officials and prosecutors will now have twice as much time to investigate and bring charges against exporters.

The majority of federal crimes currently have a five-year statute of limitations. Some serious crimes such as capital murder or treason have no statute of limitations, other serious crimes such as embezzlement from a federal financial institution or racketeering have a 10 year limit.

Congress deliberately extending the limitations period in line with serious federal crimes sends a clear signal that export violations are a priority and considered a serious offense by the U.S. government.

Private Sector Implications

Companies seeking to invest in or acquire another company subject to export control laws and U.S. sanctions will now have to request documentation for 10 years instead of five.

The law […]

By |2024-06-21T15:18:25-04:00June 21, 2024|EAR, Export, U.S. Office of Foreign Assets Control (OFAC)|Comments Off on ICYMI: Congress Doubles the Statute of Limitations for Sanctions Violations

ICYMI: Commerce, Treasury, and Justice Issue Compliance Note on Obligations of Foreign-Based Persons to Comply with U.S. Export Laws

On March 6, 2024, the Department of Commerce, Department of the Treasury, and Department of Justice issued a tri-seal compliance note titled: “Obligations of foreign-based persons to comply with U.S. sanctions and export control laws.”

The note:

  1. Highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad;
  2. Outlines the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws; and
  3. Provides an overview of compliance considerations for non-U.S. companies and compliance measures to help mitigate their risk

Applicability of U.S. Sanctions and Export Control Laws to Foreign-Based Persons

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions, primarily against foreign jurisdictions but also against individuals and entities such as traffickers and terrorists.

The following persons/entities must comply with OFAC regulations:

  • U.S. citizens and permanent resident aliens
  • All persons within the United States
  • All U.S.-incorporated entities and their foreign branches

In certain sanctions programs, foreign entities owned or controlled by U.S. persons also must comply with applicable restrictions – such as engaging in a transaction with the government of Iran. Certain sanctions programs also require foreign persons in possession of U.S.-origin goods to comply.

Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.

Applicability of U.S. Export Control Laws

The compliance […]

By |2024-03-15T13:13:23-04:00March 15, 2024|EAR, Export, U.S. Department of Commerce (DOC), U.S. Department of Justice (DOJ)|Comments Off on ICYMI: Commerce, Treasury, and Justice Issue Compliance Note on Obligations of Foreign-Based Persons to Comply with U.S. Export Laws

Significant Updates to BIS Enforcement Policies in 2022

Diaz Trade Law’s President, Jennifer Diaz, Associate Attorney Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Significant Updates to BIS Enforcement Policies in 2022“! Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

[…]

Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

 

 

 

 

[…]

Customs and Trade Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

 

 

 

[…]

Understanding the RPL Export License Exception

U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (“EAR”). Administered by the U.S. Commerce Department, the EAR is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. U.S. exporters have an important responsibility to adhere to the EAR. Violations of the EAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned.

Licensing Exception for “Servicing and Replacement of Parts and Equipment” (RPL)

An export license under the EAR is not necessary if the License Exception for “Servicing and Replacement of Parts and Equipment” (“RPL”) applies. License Exception RPL is described under Part 740.10 of the EAR. RPL is known as a transaction-based exception because the availability/applicability of the exception is based on the terms of the transaction.

According to BIS guidance, the RPL License Exception may be used for the two following scenarios:

  • Replacement Parts – This authorizes the export and reexport of replacement parts for the immediate repair of previously exported, reexported or foreign made equipment incorporating U.S. origin parts on a one-for-one replacement basis. It also authorizes the export and reexport of stock spare parts that were authorized to accompany the export of equipment.
  • Servicing and Replacement – Replacements for defective or unacceptable U.S.-origin equipment. (a) The commodity or software to be replaced must have been […]

Encryption Controls under the Export Administration Regulations

Encryption is generally defined as the process of converting information or data into a code, especially to prevent unauthorized access. Put simply, encryption makes a wide range of technologies more secure. Since 1996, most encrypted technology is controlled by the EAR. Some encrypted technology, which has military-related functionalities, is controlled by the International Traffic in Arms Regulations (“ITAR”). This article provides an overview of encryption controls under the EAR, outlines license exceptions for certain encrypted technologies, and provides best practices for export compliance.

Background on Export Administration Regulations

Over 95% of the world’s population is outside of the United States. Opportunities abound for U.S. companies that export. However, exporting is a privilege and not a right. U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (“EAR”).

Administered by the U.S. Commerce Department, the EAR is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. U.S. exporters have an important responsibility to adhere to the EAR. Violations of the EAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned.

Encryption Controls

According to 15 CFR 742.15:

“Encryption items can be used to maintain the secrecy of information, and thereby may be used by persons abroad to harm U.S. national security, foreign policy and law enforcement interests. The United States has a critical interest in ensuring that […]

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