Export Compliance Daily is providing readers with some of the top stories for April 27 - May 1 in case you missed them.
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:
The Commerce Department’s new export restrictions on military end-users may significantly raise due diligence requirements for industry, leading to licensing delays and a burdensome vetting process for technology companies, law firms said. If Commerce's Bureau of Industry and Security does not clarify the scope of the rule to limit its impact, the rules are likely to damage the semiconductor, telecommunications and aircraft sectors, the law firms said. “This could have a detrimental impact on a broad swath of U.S. industry,” Baker McKenzie said in an April 30 blog post. “A universe of transactions triggering license requirements could significantly increase.”
Some companies are concerned about the possibility of the Commerce Department issuing major export control actions during the COVID-19 pandemic, which they say will compound economic hardships caused by the mitigation response to the highly contagious disease. In interviews, industry officials said they are unsure about their ability to manage sweeping regulatory changes even as they acknowledge that a moratorium on export control actions is unlikely.
The Commerce Department amended the Export Administration Regulations to expand licensing requirements for exports, re-exports and transfers of items intended for military uses in China, Russia and Venezuela, according to a notice. The rule expands the licensing requirements for exports to China to include military end-users as well as military end-uses, broadens the list of items subject to the licensing requirement and review policy, and expands the definition for military end-use. The rule also “creates a new reason for control” and review policy for certain exports to the three countries, and added new Electronic Export Information filing requirements.
The world could soon see increased export restrictions on food supplies due to the COVID-19 pandemic, said Simon Evenett, a trade and economics professor at the University of St. Gallen in Switzerland. Although export restrictions so far have been mostly limited to medical supplies, the upcoming harvesting season in Western Europe and the U.S. could be impacted because of a lack of labor due to coronavirus-related travel restrictions, Evenett said. This could lead to protectionist-style policies regarding food as well as medicine.
European Parliament members sent a letter earlier this month urging the European Commission to refrain from lifting sanctions against Russia, according to a member of the parliament. Although some officials have called for a global cessation of all sanctions during the pandemic (see 2003250010), 19 members said sanctions should only be lifted in cases in which they hinder humanitarian trade. “[N]ot all existing sanctions prevent sanctioned countries from obtaining medical equipment and essential goods,” the letter said. The members stressed that European Union sanctions on Russia include an arms embargo, an export ban for dual use goods and restrictions on access to sensitive technologies, but do not prohibit Russia from importing medical goods. The EU should do “everything in your power to maintain” Russian sanctions, the letter said.
Russia recently announced an export quota on certain grains to ensure domestic “agricultural security” during the COVID-19 pandemic, according to a U.S. Department of Agriculture Foreign Agricultural Service report released April 7. The quota took effect April 1 and will last through June 30, the USDA said, which marks the end of the grain marketing year. Russian analysts have said the quota will not have a negative impact on the Russian grain market, the USDA said. Analysts also said the measure is largely unnecessary due to the high grain harvest expected this summer.
A United Kingdom bank was fined more than £20 million by the U.K.’s Office of Financial Sanctions Implementation for violating Ukraine-related sanctions, OFSI said in a notice released March 31. OFSI said Standard Chartered Bank (SCB) made more than 100 loans to Denizbank A.S., which is owned by Russia-based Sberbank, an entity sanctioned by the European Union. While some of the loans qualified for an EU exemption under the sanctions regime, about 70 of the loans did not qualify. OFSI estimated the value of the 70 loans at about $290 million and deemed the case “most serious.”
Russia is considering restricting exports of “relevant groups of foods” and medicine due to the coronavirus COVID-19 pandemic, according to an unofficial translation of a March 23 government notice. The government will conduct weekly reviews of the country’s supplies before proposing export restrictions, the notice said. Russia had placed temporary export restrictions on processed grains last week -- including buckwheat, rice and oat flakes -- but recently withdrew that measure, according to a March 24 report from Reuters.
The Commerce Department Bureau of Industry and Security added 24 entities to its Entity List and revised five existing entries, the agency said in a notice. The new entries include companies in China, Iran, Pakistan, Russia and the United Arab Emirates; and the revised entries are for entities in France, Iran, Lebanon, Singapore and the United Kingdom. The changes take effect March 16. All shipments now requiring a license as a result of this rule that were on dock for loading or aboard a carrier to a port as of that date may proceed to their destinations under the previous eligibility, BIS said.