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 7,500 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, and Alexander Witt.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Targets Iran’s Billion Dollar Metals Industry and Senior Regime Officials; The Daily Bugle; Monday, 13 January 2020; Item #4.
- State Adjusts Civil Monetary Penalties for ITAR Violations; The Daily Bugle; Tuesday, 14 January 2020; Item #1.
- UK ECJU Updates Multiple Open General Export Licenses (OGELs); The Daily Bugle; Tuesday, 14 January 2020; Item #6.
- Treasury/OFAC Issues New Iran-Related Frequently Asked Question Nr. 816; The Daily Bugle; Thursday, 16 January 2020; Item #9.
- EU Publishes Information on Measures Adopted by Member States Concerning Export of Dual-Use Items; The Daily Bugle; Friday, 17 January 2020; Item #5.
1. Treasury/OFAC Targets Iran’s Billion Dollar Metals Industry and Senior Regime Officials
(Source: Treasury/OFAC, 10 Jan 2020.) [Excerpts.]
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against eight senior Iranian regime officials who have advanced the regime’s destabilizing objectives, as well as the largest steel, aluminum, copper, and iron manufacturers in Iran, who collectively generate billions of dollars annually. Treasury’s action includes the designations of Ali Shamkhani, the Secretary of Iran’s Supreme National Security Council; Mohammad Reza Ashtiani, the Deputy Chief of Staff of Iranian armed forces; and Gholamreza Soleimani, the head of the Basij militia of the Islamic Revolutionary Guards Corps (IRGC). In addition, Treasury designated 17 Iranian metals producers and mining companies; a network of three China- and Seychelles-based entities; and a vessel involved in the purchase, sale, and transfer of Iranian metals products, as well as in the provision of critical metals production components to Iranian metal producers. …
FOREIGN PURCHASERS AND TRANSPORTERS OF IRANIAN STEEL, AND PROVIDERS OF CRITICAL MATERIALS NEEDED FOR IRANIAN METAL PRODUCTION …
Pamchel Trading Beijing Co. Ltd. is being designated pursuant to E.O. 13871 for having knowingly engaged, on or after the date of the E.O. 13871, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran, as well as for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or service in support of Khalagh Tadbir Pars Co.
Pamchel Trading Beijing Co. Ltd. uses Power Anchor Limited, located in the Seychelles, as a front company to obfuscate the true Iranian end-user for metals-related materials shipped to Iran. Pamchel Trading Beijing Co. Ltd. has also used Power Anchor Limited to facilitate payments from Iranian steel companies for purchases of graphite electrodes used in metal production brokered by Pamchel Trading Beijing Co. Ltd. Power Anchor Limited is being designated pursuant to E.O. 13871 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Pamchel Trading Beijing Co. Ltd.
In September 2019, the vessel Hong Xun transported steel slabs purchased by Pamchel Trading Beijing Co. Ltd. from Esfahan Mobarakeh Steel Company from Bandar Abbas, Iran, to China. Hongyuan Marine Co. Ltd., located in Zhejian, China, is the registered owner of the vessel Hong Xun, as well as the vessel’s Ship Manager/Commercial Manager. Hongyuan Marine Co. Ltd. is being designated pursuant to E.O. 13871 for having knowingly engaged, on or after the date of E.O. 13871, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran through its vessel, Hon Xun. OFAC is also identifying the Hong Xun as blocked property in which Hongyuan Marine Co. Ltd. has an interest.
IRANIAN IRON AND STEEL COMPANIES AND OMAN-BASED SUPPLIER
Today’s action targets the 13 largest steel and iron manufacturers in Iran, who collectively generate billions in sales annually.
Mobarakeh Steel Company is the biggest steel producer in the Middle East and the biggest direct reduced iron producer in the world. Mobarakeh Steel Company produces more than 50 percent of Iran’s steel in all major markets. OFAC previously designated Mobarakeh Steel Company in October 2018 pursuant to E.O. 13224, a counterterrorism authority, for providing material support to Mehr Eqtesead Iranian Investment Company, an IRGC-affiliated entity.
In addition to Mobarakeh, OFAC is designating Saba Steel, Hormozgan Steel Company, Esfahan Steel Company, Oxin Steel Company, Khorasan Steel Company, South Kaveh Steel Company, Iran Alloy Steel Company, Golgohar Mining and Industrial Company, Chadormalu Mining and Industrial Company, Arfa Iron and Steel Company, Khouzestan Steel Company, and Iranian Ghadir Iron & Steel Co pursuant to E.O. 13871 for operating in the iron, steel, aluminum, or copper sectors of Iran.
OFAC is also designating Oman-based Reputable Trading Source LLC, which is owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, Khouzestan Steel Company. Reputable Trading Source LLC was incorporated to provide and supply the spare parts, equipment, and raw material that is required by steel companies, and further engages in marketing and exporting steel products from Iran.
IRANIAN ALUMINUM AND COPPER COMPANIES
OFAC is also taking action against the top companies operating in the Iranian aluminum and copper sectors.
Iran Aluminum Company was established as the first producer of aluminum bricks in Iran, and accounts for approximately 75 percent of the country’s total aluminum production volume. Also designated today is Al-Mahdi Aluminum Corporation, a top producer of aluminum in Iran, and National Iranian Copper Industries, the leading copper producer in the Middle East and North Africa region. Khalagh Tadbir Pars Co. is a minerals trading firm that deals in iron ore, copper concentrate, alumina, and aluminum.
Iran Aluminum Company, Al-Mahdi Aluminum Corporation, National Iranian Copper Industries, and Khalagh Tadbir Pars Co. are being designated pursuant to E.O. 13871 for operating in the iron, steel, aluminum, or copper sectors of Iran. …
All property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.
In addition, persons that engage in certain transactions with the persons designated today may themselves be exposed to sanctions. Furthermore, any foreign financial institution that knowingly conducts or facilitates a significant transaction for or on behalf of the persons designated today could be subject to U.S. correspondent or payable-through account sanctions.
Identifying information on the individuals, entities, and vessel designated today.
2. State Adjusts Civil Monetary Penalties for ITAR Violations
(Source: Federal Register, 14 Jan 2020.) [Excerpts.]
85 FR 2020-2022: Department of State 2020 Civil Monetary Penalties Inflationary Adjustment
* AGENCY: Department of State.
* ACTION: Final rule.
* SUMMARY: This final rule is issued to adjust the civil monetary penalties (CMP) for regulatory provisions maintained and enforced by the Department of State. The revised CMP adjusts the amount of civil monetary penalties assessed by the Department of State based on the December 2019 guidance from the Office of Management and Budget. The new amounts will apply only to those penalties assessed on or after the effective date of this rule, regardless of the date on which the underlying facts or violations occurred.
* DATES: This final rule is effective on January 14, 2020.
* FOR FURTHER INFORMATION CONTACT: Alice Kottmyer, Attorney-Adviser, Office of Management, firstname.lastname@example.org. ATTN: Regulatory Change, CMP Adjustments, (202) 647-2318.
* SUPPLEMENTARY INFORMATION: …
Overview of the Areas Affected by This Rule
Within the Department of State (title 22, Code of Federal Regulations), this rule affects four areas:
(1) Part 35, which implements the Program Fraud Civil Remedies Act of 1986 (PFCRA), codified at 31 U.S.C. 3801-3812;
(2) Part 103, which implements the Chemical Weapons Convention Implementation Act of 1998 (CWC Act);
(3) Part 127, which implements the penalty provisions of sections 38(e), 39A(c), and 40(k) of the Arms Export Control Act (AECA) (22 U.S.C. 2778(e), 2779a(c), 2780(k)); and
(4) Part 138, which implements Section 319 of Public Law 101-121, codified at 31 U.S.C. 1352, and prohibits recipients of federal contracts, grants, and loans from using appropriated funds for lobbying the Executive or Legislative Branches of the federal government in connection with a specific contract.
Specific Changes to 22 CFR Made by This Rule …
III. Part 127
The Assistant Secretary of State for Political-Military Affairs is responsible for the imposition of CMPs under the International Traffic in Arms Regulations (ITAR), which is administered by the Directorate of Defense Trade Controls (DDTC).
(1) AECA Section 38(e)
Applying the 2020 multiplier, the new maximum penalty under 22 U.S.C. 2778 (22 CFR 127.10(a)(1)(i)) is $1,183,736.
(2) AECA Section 39A(c)
Applying the 2020 multiplier, the new maximum penalty under 22 U.S.C. 2779a (22 CFR 127.10(a)(1)(ii)) is $860,683, or five times the amount of the prohibited payment, whichever is greater.
(3) AECA Section 40(k)
Applying the 2020 multiplier, the new maximum penalty under 22 U.S.C. 2780 (22 CFR 127.10(a)(1)(iii)) is $1,024,457. …
3. UK ECJU Updates Multiple Open General Export Licenses (OGELs)
(Source: UK ECJU, 14 Jan 2020.)
The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has updated the following licenses on its website:
Open General Export Licenses (OGELs):
* Access Overseas to Software and Technology for Military Goods: Individual Use Only)
* Export After Exhibition: Dual-Use Items
* Software and Source Code for Military Goods
* Export After Exhibition or Demonstration: Military Goods
* Exports or Transfers in Support of UK Government Defence Contracts
* Technology for Military Goods
* Export for Repair/Replacement Under Warranty: Military Goods
* Historic Military Goods
* Information Security Items
* Military and Dual-Use Goods: UK Forces Deployed in Non-Embargoed Destinations
* Military Goods: For Demonstration
* Oil and Gas Exploration: Dual-Use Items
* Military Surplus Vehicles
* Low Value Shipments
* Export for Repair/Replacement Under Warranty: Dual-Use Items
* Export for Exhibition: Military Goods
* Cryptographic Development
* Trade and Transportation: Small Arms and Light Weapons
* Category C Goods
* Export After Repair/Replacement Under Warranty: Dual-Use Items
* PCBs And Components for Dual-Use Items
* Technology for Dual-Use Items
* PCBs and Components for Military Goods
* PCBs and Components for Military Goods
* Export After Repair/Replacement Under Warranty: Military Goods
4. Treasury/OFAC Issues New Iran-Related Frequently Asked Question Nr. 816
(Source: Treasury/OFAC, 16 Jan 2020.)
Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) is issuing a new Iran-related frequently asked question.
For more information on this specific action, please visit this page.
5. EU Publishes Information on Measures Adopted by Member States Concerning Export of Dual-Use Items
(Source: Official Journal of the European Union, 17 Jan 2020.)
Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (1): Information on measures adopted by Member States in conformity with Articles 4, 5, 6, 8, 9, 10, 17 and 22.
Articles 5, 6, 8, 9, 10, 17 and 22 of Council Regulation (EC) No 428/2009 (hereunder “the Regulation”) set out that measures taken by Member States in implementation of the Regulation should be published in the Official Journal of the European Union.
Furthermore, the Commission and the Member States have decided to also publish additional information on measures imposed by Member States under Article 4 in order to ensure that exporters have access to comprehensive information on the controls applicable throughout the EU.
– Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (1): Information on measures adopted by Member States in conformity with Articles 4, 5, 6, 8, 9,