The Commerce Department’s increased restrictions on shipments to military end-users is causing widespread confusion and could cripple exporters struggling to survive during the global COVID-19 pandemic (see 2005010037), industry groups said. The Bureau of Industry and Security's April 28 final rule (see 2004270027), set to take effect June 29, is too complex and was released with “poor” timing and without industry input, the National Customs Brokers & Forwarders Association of America said.
Russia export controls and sanctions
The use of export controls and sanctions on Russia has surged since the country's invasion of Crimea in 2014, and especially its invasion of Ukraine in in February 2022. Similar export controls and sanctions have been imposed by U.S. allies, including the EU, U.K. and Japan. The following is a listing of recent articles in Export Compliance Daily on export controls and sanctions imposed on Russia:
A U.S. official again argued that the U.S. has the authority to invoke snapback sanctions under the Iran nuclear deal and threatened to impose them unless an international arms embargo against Iran is extended. Brian Hook, the U.S. special representative for Iran, said the U.S. will trigger a United Nations provision to reimpose a host of international sanctions against Iran if the arms embargo, set to expire in October, is not extended. Without the embargo, Iran could import a range of advanced military weapons from China and Russia, Hook said. “One way or another, we're going to accomplish this,” he said, speaking during a June 9 virtual talk hosted by the Heritage Foundation.
The European Union is talking about including a carbon tax on imports as it comes out of the COVID-19-driven recession, and Russia, the U.S. and China asked about these plans at a World Trade Organization meeting June 8, wondering if such a tariff could be levied within the WTO rules. Russia asked what sectors would be subject to the tax, and why, and asked if the EU is hoping to protect the steel industry under the pretext of fighting climate change.
A foreign investment review bill being considered by the United Kingdom will significantly expand the number of transactions subject to reviews and create greater due diligence requirements for U.K. companies, trade lawyers said. As more countries aim to increase their foreign investment screening, particularly the U.S. (see 2005200032), the U.K. is hoping to better protect its industry from trade theft and national security threats, the lawyers said.
Five senators announced a bill to expand on sanctions against Russia’s Nord Stream 2 pipeline. The bill would sanction vessels involved in laying the pipes, those who provide the vessels and those who provide tethering services to those vessels, according to a June 4 press release. “This new bill will once and for all clarify that those involved in any way with installing pipeline for the project will face crippling and immediate American sanctions,” said Sen. Ted Cruz, R-Texas, who introduced the bill along with Sens. Jeanne Shaheen, D-N.H.; John Barrasso, R-Wyo.; Tom Cotton, R-Ark.; and Ron Johnson, R-Wis.
The Commerce Department's Bureau of Industry and Security corrected the formatting for an April final rule that expanded licensing requirements for certain military-related exports to China, Russia and Venezuela, according to a notice. The corrected format “publishes the full text of each revised Export Control Classification Number on the Commerce Control List,” the notice said. BIS issued the correction because the agency “felt it was easier for compliance purposes,” said Hillary Hess, BIS’s regulatory policy director, speaking during a June 2 Regulations and Procedures Technical Advisory Committee meeting. “It does not change the substance of the rule at all.”
Germany asked the European Union to impose sanctions on Russia for a 2015 cyberattack on Germany’s parliament, Germany’s Federal Foreign Office said May 28, according to an unofficial translation. Germany said it will ask the EU to invoke its “cyber sanctions regime … with respect to those responsible for the attack,” including Russian national Dmitri Badin. Germany issued an arrest warrant for Badin after alleging he worked with others to “carry out intelligence activities” against the country. Germany added that it is considering “further measures.”
A North Korean bank and 28 North Korean and Chinese citizens were charged with evading U.S. sanctions, according to an indictment unsealed May 28. The scheme -- which included branches of North Korea’s state-owned Foreign Trade Bank in Thailand, Libya, Austria, Russia, Kuwait and China -- involved a series of front companies used to access the U.S. financial system. The scheme allowed the banks to process at least $2.5 billion in illegal payments through more than 250 front companies, which provided funding for North Korea’s nuclear missile programs.
Russia is considering a draft bill that would allow imports of sanctioned goods under certain circumstances, according to a May 22 post on a Baker McKenzie blog. The bill, proposed earlier this month, will allow imports if the goods constitute “essential commodities that do not have analogues in Russia” or if Russia is experiencing a shortage of those goods due to the COVID-19 pandemic, Baker McKenzie said.
Republican lawmakers urged the Commerce Department to be more transparent when imposing export restrictions on critical U.S. industries, saying they are concerned that Commerce did not consult with industry before imposing significant export regulations last week. In a May 6 letter, six senators asked President Donald Trump to more closely follow congressional intent as described in the 2018 Export Control Reform Act, which lists a preference for a public comment period and multilateral export controls over unilateral decisions.