A California-based semiconductor and telecommunications technology company recently received a warning letter from the Bureau of Industry and Security after it voluntarily disclosed possible export violations. The company, Credo, said it “inadvertently provided three evaluation boards of nominal value” to two customers without required export licenses. Credo submitted a final voluntary self-disclosure to BIS in June and received a warning letter in September with no penalties, according to a January Securities & Exchange Commission filing. Credo didn’t say where the customers were located but said it sells its products in Asia, including in markets where “multiple” companies have been added to the Commerce Department’s Entity List or the military end-user list. The company said it’s “in the process” of improving its export compliance policies and procedures but believes it “remedied the deficiencies that resulted in the apparent violations through additional training, system enhancements and enhanced export controls.”
Six individuals were named in an indictment at the U.S. District Court for Central California for their roles in a scheme to smuggle weapons and ammunition from the U.S. to a Mexican drug cartel, the Office of the U.S. Attorney for the Central District of California said Jan. 24. Four of the six were arrested Jan. 19 as part of Operation Semper Infidelis conducted by a Los Angeles Strike Force investigation. The operation targeted a weapons trafficking organization that provided firearms and ammunition to the Cartel Jalisco Nueva Generacion. The indictment charges the six individuals with conspiracy to violate federal export laws by shipping the weapons to Mexico.
Sen. Dan Sullivan, R-Alaska, recently introduced the Sanctions Targeting Aggressors of Neighboring Democracies (STAND) with Taiwan Act of 2022, a bill that he says "would impose crippling, comprehensive economic and financial sanctions on China in the event that the People’s Liberation Army (PLA) or its proxies initiate a military invasion of the island democracy of Taiwan." Sullivan said the bill would prohibit hedge funds, venture capital firms and private equity firms from investing in any Chinese company in a Made in China 2025 priority sector and would sanction Chinese financial institutions and industrial sectors. It also would ban the importation of a good "mined, produced, or manufactured wholly or in part in the People’s Republic of China, or by a person working for or affiliated with an entity or industry wholly financed by the Chinese Communist Party or in which the Chinese Communist Party has a majority ownership interest," unless the president said the importation is necessary for the nation's economic security, national security or public health.
A group of Senate Republicans introduced a bill last week that would redesignate the Yemen-based Houthi militant group as a foreign terrorist organization, reversing a Biden administration decision last year to revoke some sanctions against the group. The bill, introduced by Sen. Ted Cruz, R-Texas, and sponsored by eight other Republicans, would subject the Houthis to strict financial blocking measures and sanction the group’s leaders. The Biden administration revoked the sanctions, which were imposed under President Donald Trump, because of concerns that they were hindering humanitarian aid to the region (see 2102100016). “I’ve consistently sought to reimpose those sanctions, and it’s now clear that if the Biden administration is unwilling to do so then Congress should mandate that they do,” Cruz said.
The U.N. Security Council on Jan. 24 removed one entry from its ISIL (Da’esh) and al‑Qaida sanctions list. The council no longer lists Tunisian national Khalil Ben Ahmed Ben Mohamed Jarraya.
The Office of Foreign Assets Control on Jan. 24 extended two Ukraine-related licenses. General License 13Q, which replaces 13P "Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group," and General License 15K, which replaces 15J "Authorizing Certain Activities Involving GAZ Group." These licenses were set to expire Jan. 26, via a previous extension issued Dec. 23, 2020. The new licenses are being extended for 90 days, through 12:01 a.m. Eastern Daylight Time, April 27. OFAC also updated its frequently asked questions related to the updated GLs.
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The House’s America Competes Act of 2022 proposes a host of export control and sanctions provisions, including new restrictions on exports of electronic waste-related goods, designations targeting China and a repeal of the sunset of a human rights sanctions authority. The bill, unveiled this week as the response to the Senate’s U.S. Innovation and Competition Act, would also require the Biden administration to conduct “periodic” reviews of its export control lists to better protect critical technologies and would urge the administration to reexamine U.S. export policies for countries that supply weapons to terrorist organizations.
The Biden administration this week previewed its plan to impose a “massive” set of export controls and sanctions on the Russian economy if the country further invades Ukraine, including measures to cut off Russian companies from both U.S. and foreign-produced technology inputs. The export restrictions could include an expansion of the Commerce Department’s foreign direct product rule, officials said, and would specifically target several of Russia’s “key” technology sectors, including its defense, aerospace, quantum computing and artificial intelligence industries.
Although the Department of Justice’s China’s initiative (see 2012030033) is still likely an agency priority, the program has slowed under the Biden administration and may lead to less export control and sanctions-related prosecutions, said George Pence, a trade lawyer with Akin Gump. Pence, speaking during a Jan. 20 webinar hosted by the law firm, said he thinks “criminal export and sanctions prosecutions are along for the ride but are not driving the China initiative.”