The Daily Bugle Weekly Highlights: Week 26 (24 – 28 June 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.

We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of Australia, Canada, U.K., and other countries and international organizations.  Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items. To subscribe, click here.

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

  1. Commerce/BIS Adds Five Entities under the Destination of China to the Entity List; The Daily Bugle; Monday 24 June 2019, Item #1;
  2. President Imposes Sanctions on Iran; The Daily Bugle; Wednesday, 26 June 2019, Item #2;
  3. Treasury/OFAC: “Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses”; The Daily Bugle; Wednesday 26 June 2019, Item #7;
  4. Commerce/BIS Amends Unverified List, Correcting One Entry and Removing Eight Entries.; The Daily Bugle; Thursday 27 June 2019, Item #1;
  5. EU Council Prolongs Economic Sanctions on Russia by Six Months; The Daily Bugle; Thursday, 27 June 2019, Item #9.

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1. Commerce/BIS Adds Five Entities under the Destination of China to the Entity List

(Source: Federal Register, 24 June 2019.) [Excerpts.]

84 FR 29371-29375: Addition of Entities to the Entity List and Revision of an Entry on the Entity List

* AGENCY: Bureau of Industry and Security, Commerce.

* ACTION: Final rule.

* SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding five entities to the Entity List. These five entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities will be listed on the Entity List under the destination of China. This rule also modifies one entry on the Entity List under the destination of China.

* DATES: This rule is effective June 24, 2019.

* FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email: ERC@bis.doc.gov.

* SUPPLEMENTARY INFORMATION: …

Additions to the Entity List …

This final rule adds the following five entities to the Entity List in China:

  – Chengdu Haiguang Integrated Circuit, including two aliases (Hygon and Chengdu Haiguang Jincheng Dianlu Sheji);

  – Chengdu Haiguang Microelectronics Technology, including two aliases (HMC and Chengdu Haiguang Wei Dianzi Jishu);

  – Higon, including five aliases (Higon Information Technology, Haiguang Xinxi Jishu Youxian Gongsi, THATIC, Tianjing Haiguang Advanced Technology Investment, and Tianjing Haiguang Xianjin Jishu Touzi Youxian Gongsi);

  – Sugon, including nine aliases (Dawning, Dawning Information Industry, Sugon Information Industry, Shuguang, Shuguang Information Industry, Zhongke Dawn, Zhongke Shuguang, Dawning Company,

and Tianjin Shuguang Computer Industry);

  – Wuxi Jiangnan Institute of Computing Technology, including two aliases (Jiangnan Institute of Computing Technology and JICT).

Modification to the Entity List

This final rule implements the decision of the ERC to modify one existing entry, NUDT, which was added to the Entity List under the destination of China on February 18, 2015 (80 FR 8527). BIS is modifying the existing entry National University of Defense Technology (NUDT) to add one alias (Hunan Guofang Keji University) and four locations.

Dated: June 18, 2019.

Richard E. Ashooh, Assistant Secretary for Export Administration.

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2. President Imposes Sanctions on Iran

(Source: Federal Register, 26 June 2019.) [Excerpts.]

84 FR 30571: Executive Order 13876; Imposing Sanctions With Respect to Iran

… I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 12957 of March 15, 1995, in light of the actions of the Government of Iran and Iranian-backed proxies, particularly those taken to destabilize the Middle East, promote international terrorism, and advance Iran’s ballistic missile program, and Iran’s irresponsible and provocative actions in and over

international waters, including the targeting of United States military assets and civilian vessels, hereby order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i) the Supreme Leader of the Islamic Republic of Iran and the Iranian Supreme Leader’s Office (SLO); or

(ii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: …

(Presidential Sig.)

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3. Treasury/OFAC: “Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses”

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

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending Venezuela-related General License 13A, “Authorizing Certain Activities Involving Nynas AB”​to extend its expiration date to October 25, 2019.

Today OFAC extended the expiration date of two general licenses related to GAZ Group by issuing General License No. 13L – Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons, and General License No. 15F – Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts with GAZ Group, or Certain Automotive Safety Activities.

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4. Commerce/BIS Amends Unverified List, Correcting One Entry and Removing Eight Entries.

(Source: Federal Register, 27 June 2019.) [Excerpts.]

84 FR 30593-30595: Revisions to the Unverified List

* AGENCY: Bureau of Industry and Security, Commerce.

* ACTION: Final rule.

* SUMMARY: The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by removing eight (8) persons from the Unverified List (“UVL”) and correcting the name for one (1) person currently listed on the UVL. The eight persons are removed from the UVL on the basis that BIS was able to verify their bona fides because of an end-use check.

* DATES: This rule is effective: June 27, 2019.

* FOR FURTHER INFORMATION CONTACT: Kevin Kurland, Director, Office of Enforcement Analysis, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-4255 or by email at UVLRequest@bis.doc.gov.

* SUPPLEMENTARY INFORMATION: …

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5. EU Council Prolongs Economic Sanctions on Russia by Six Months

(Source: Council of the European Union, 27 June 2019.)

On 27 June 2019, the Council prolonged economic sanctions targeting specific sectors of the Russian economy until 31 January 2020.

This decision follows an update from Chancellor Merkel and President Macron to the European Council of 20-21 June 2019 on the state of implementation of the Minsk Agreements, to which the decision as to maintain the sanctions is linked.

Following this update, the European Council called for an urgent resumption of negotiating efforts with a view to the implementation of the Minsk Agreements and for measures aimed at rebuilding confidence among the parties. In this context, EU leaders unanimously agreed to maintain the economic sanctions on Russia. The Council formalised this decision today by written procedure.  

The measures target the financial, energy and defence sectors, and the area of dual-use goods. They were originally introduced on 31 July 2014 for one year in response to Russia’s actions destabilising the situation in Ukraine and strengthened in September 2014.

The economic sanctions prolonged by this decision include:

  – limiting access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defence companies

  – imposing an export and import ban on trade in arms

  – establishing an export ban for dual-use goods for military use or military end users in Russia

  – curtailing Russian access to certain sensitive technologies and services that can be used for oil production and exploration

In addition to these economic sanctions, several EU measures are also in place in response to the crisis in Ukraine including:  

  – targeted individual restrictive measures, namely a visa ban and an asset freeze currently against 170 individuals and 44 entities, in force until 15 September 2019;

  – restrictive measures in response to the illegal annexation of Crimea and Sevastopol, limited to the territory of Crimea and Sevastopol, in force until 23 June 2020.

The duration of the economic sanctions was linked by the European Council on 19 March 2015 to the complete implementation of the Minsk Agreements, which was foreseen to take place by 31 December 2015. Since this did not happen, the sanctions have remained in place.

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