The Daily Bugle Weekly Highlights: Week 17 (22 – 26 Apr 2019)

Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 6,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Alexander P. Bosch, Vincent J.A. Goossen, and Alex Witt.

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Last week’s highlights of The Daily Bugle included in this edition are:

  1. White House Decides Not to Reissue Waivers for Iran Oil Imports, Aims to “Bring Iran’s Oil Exports to Zero”; The Daily Bugle; Monday, 22 Apr 2019, Item #6;
  2. Canadian Government Amends Export Control List; The Daily Bugle; Monday, 22 Apr 2019, Item #7;
  3. Dutch Government Amends Export Controls Concerning Egypt and Qatar; The Daily Bugle; Tuesday, 23 Apr 2019, Item #5;
  4. Treasury/OFAC Announces Settlement Agreement with Haverly Systems, Inc.; The Daily Bugle; Thursday, 25 Apr 2019, Item #6;
  5. Treasury/OFAC Published Update Regarding Foreign Interference in U.S. Elections Sanctions Regulations; The Daily Bugle; Friday, 26 Apr 2019, Item #4;

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1. White House Decides Not to Reissue Waivers for Iran Oil Imports, Aims to “Bring Iran’s Oil Exports to Zero”

(Source:The White House, 21 Apr 2019.)

Statement from the Press Secretary on Cooperation between the United States, Saudi Arabia, and the United Arab Emirates on Energy and Iran Policies

President Donald J. Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May. This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue. The United States, Saudi Arabia, and the United Arab Emirates, three of the world’s great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied. We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market.

The Trump Administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies, and security in the Middle East. The President’s decision to eliminate all SREs follows the designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization, demonstrating the United States commitment to disrupting Iran’s terror network and changing the regime’s malign behavior. We welcome the support of our friends and allies for this effort.​

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2. Canadian Government Amends Export Control List

(Source: Global Affairs Canada, 17 Apr 2019.) 

On April 5, 2019, the Government of Canada finalized the regulatory process to amend the Export Control List. This amendment serves to add controls, clarify controls and remove controls over specific items as agreed upon in the various multilateral export control regimes.

The current December 2015 version of “A Guide To Canada’s Export Control List” remains in effect until May 16, 2019. On May 17, 2019, the December 2016 version of the “A Guide To Canada’s Export Control List” (Guide) will formally come into effect. Exporters will be advised once the December 2016 version of the Guide becomes available on the Export Controls Division website.

The new version of the Guide will incorporate Canadian commitments and obligations to the various multilateral export control regimes up to December 31, 2016. 

A brief overview of key changes are provided on the Export Controls Division website.

The regulation and the Regulatory Impact Analysis Statement were published on the Canada Gazette website on April 17, 2019. Please contact the Export Controls Policy Division for more details.

If you have any questions, please contact us via e-mail at expctrlpol@international.gc.ca.

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3. Dutch Government Amends Export Controls Concerning Egypt and Qatar

(Source:Overheid.nl, 18 Apr 2019.) [Excerpts; unofficial translation by Sven Goor of Full Cirlce Compliance.]

On 18 April 2019, the Minister of Foreign Trade and Development Cooperation and the Minister of Foreign Affairs presented a letter on the Dutch arms export control policy to the Dutch parliament. Below the key takeaways of this letter.

More Stringent Weapons Export Policy

Due to a more stringent arms export controls, which is a direct result of the ongoing Yemen conflict, exports with Egypt as final destination now require an individual permit.  The general transit license NL007 license can no longer be used for this country.  However, the same license can now be used again for Qatar, since this country left the Saudi-led coalition in Yemen.

Duration Export Licenses

The first of July 2019 will see the implementation of a new policy by the Dutch government which offers the possibility for an extended duration of licenses for exporting military and Dual-Use goods. This change in policy will have the following effects:

Military items

  – Individual and global licenses for exports of military goods to allies of the Netherlands, including after sales and brokering, will now be valid for 3 years. Allies include EU Member States, NATO-allies, Australia, Japan, New Zealand, and Switzerland.

  – Due to limitations regarding the ability to perform a thorough risk assessment over a period longer than 1 year, the validity of individual and global licenses for military goods to third countries (non-allies) will remain 1 year.

  – The validity of temporary licenses to third countries and licenses linked to other rules and regulations will remain one year.

Dual-Use items

  – In principle, all individual and global licenses for the export of dual-use goods will have a standard duration of two years.

  – Licenses for sensitive dual-use goods to sensitive destinations, which are subject to reviews by the Dutch Ministry of Foreign Affairs, will keep their validity of 1 year. This includes exemption requests for the Chemical Weapons Convention, license requests for items on the NSG-trigger list, Wassenaar Sensitive/Very Sensitive goods, and Annex-IV goods, and licenses related to sanctions concerning Regulation (EU) 2019/125(the “anti-torture regulation”).

Communication Equipment

The Dutch Cabinet replied to parliamentary questions regarding the use of unlicensed Dutch communication equipment in Saudi tanks. It was impossible to track the communication equipment to specific tanks and units.  However, due to the volume of sets delivered to the U.S. manufacturer of tanks it is very likely that some of this communication equipment is operational in Saudi tanks. This answer concludes the inquiry.

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4. Treasury/OFAC Announces Settlement Agreement with Haverly Systems, Inc.

(Source: Treasury/OFAC, 25 Apr 2019.)

Haverly Systems, Inc. (“Haverly”), a New Jersey corporation with offices in Texas and California, has agreed to pay $75,375 to settle its potential civil liability for two apparent violations of the Ukraine Related Sanctions Regulations, 31 C.F.R. part 589 (URSR). Specifically, from on or about May 31, 2016 to on or about January 11, 2017, Haverly apparently violated Directive 2 under Executive Order 13662, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine” (“Directive 2”), and § 589.201 of the URSR, when it transacted or otherwise dealt in new debt of greater than 90 days maturity of JSC Rosneft (“Rosneft”), an entity identified by OFAC on the Sectoral Sanctions Identification List as subject to Directive 2.  OFAC determined that Haverly did not voluntary self-disclose the apparent violations to OFAC, and the apparent violations constitute a non-egregious case.

For more information, please visit the following web notice.

New information on OFAC Civil Penalties and Informal Settlements is now available.

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5. Treasury/OFAC Published Update Regarding Foreign Interference in U.S. Elections Sanctions Regulations

(Source:Treasury/OFAC, 26 Apr 2019.)

The Office of Foreign Assets Control (OFAC) is issuing regulationsto implement Executive Order 13848 of September 12, 2018 (“Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election”).  These regulations are currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on April 29, 2019.  OFAC intends to supplement this part 579 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.