Companies need to stay on top of their compliance because significant escalation of Russia-related sanctions is possible, KPMG experts said. The "dramatic increase in the use of sanctions and other controls" over the past two months will likely continue to expand in complexity, said Jason Rhoades, KPMG senior manager-trade and customs services, during a May 11 webinar. Because Russian behavior toward Ukraine has not changed, "we expect [the use of sanctions] to continue to grow," Rhoades said. "There is significant room still out there for [sanctions] escalation."
Israel’s Defense Ministry is granting fewer export licenses to the country’s spyware companies amid mounting pressure from the U.S., according to an April 25 report from Globes, an Israeli business news site. The report said Israeli company Nemesis was forced to shut down last month after the country’s Defense Export Control Agency refused to grant it export licenses, and other industry executives have complained about an “abrupt change in policy” toward companies exporting spyware. Other companies -- including NSO Group, Cognyte, QuaDream and Wintego -- are on a “short list” of businesses that have struggled in recent months from a “lack of approvals for new deals and cancellation of export permits that have expired,” the report said.
The State Department is “finalizing” discussions with several trading partners on its new open general license concept for certain defense exports, senior agency official Mike Miller. The concept, which could begin as a pilot program, would allow U.S. exports to certain U.S. trading partners without having to apply for a specific license (see 2109290056).
Anthony Rapa, a former partner at Kirkland & Ellis, joined Blank Rome as a partner in its National Security practice, the firm announced. Blank Rome said Rapa will work on "sanctions and export control-related matters in cross-border transactions, mergers and acquisitions, government investigations, and regulatory matters." Such issues under Rapa's portfolio include regulations administered under the Export Administration Regulations, the Bureau of Industry and Security and the International Traffic in Arms Regulations.
The State Department’s Directorate of Defense Trade Controls was able to close significantly more end-use checks in 2021 compared with 2020 despite some continued travel restrictions caused by the COVID-19 pandemic. In its annual Blue Lantern report released this month -- which details the agency’s end-use monitoring efforts on controlled defense articles and services -- DDTC said it closed checks on 256 export licenses or applications during fiscal year 2021, an increase of more than 38% from FY 2020.
Some U.S. export control policies are hindering the American semiconductor sector and chip innovation, technology companies and trade groups told the Commerce Department in recent comments (see 2201210024). Commerce can take steps to ease compliance challenges, including around deemed export controls, and make sure to propose narrow and multilateral emerging and foundational technology controls, the commenters said.
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The State Department’s Directorate of Defense Trade Controls plans to send out a customer service satisfaction survey after its Help Desk and Response Team closes a case. The new survey, announced last week, will provide DDTC with industry feedback to “improve the quality of our support services,” the agency said.
Tuqiang Xie, of Irvine, California, was sentenced to a year in prison for brokering the sales of export-controlled defense articles from China and filing a false corporate tax return, the U.S. Attorney's Office for the Northern District of Illinois said March 31. In 2019, Xie pleaded guilty to one count of violating the Arms Export Control Act and one count of filing a false tax return. Sentencing took place after hearing in Chicago. In the plea agreement, Xie admitted to using his Irvine-based company, Bio-Medical Optics, as a broker for the shipment of defense articles listed on the U.S. Munitions List and the U.S. Munitions Import List. Xie had not obtained the required export license for these items.
The Bureau of Industry and Security this week revoked export privileges for five people after they illegally exported defense items or weapons ammunition.