Archive for the ‘Entity List’ Category


Jun

28

ZTE Gets Last Minute Reprieve (Sort Of)


Posted by at 10:33 pm on June 28, 2016
Category: BISChinaEntity ListIran Sanctions

ZTE Stand 6 via http://www.zte.com.cn/cn/events/ces2013/show/201301/t20130110_381605.html [Fair Use]The Bureau of Industry and Security today announced that it was extending the Temporary General License which permitted exports to ZTE from June 30 all the way to August 30. ZTE, as this blog reported here, was placed on the Entity List because of elaborate shenanigans by the company by which it bought U.S. goods and resold them to Iran.

Two weeks after bringing the ban hammer down on ZTE, BIS issued a temporary general license which covered March 24 to June 30, more than three months. The new temporary license expires on August 30, one day short of two months from June 30. Why this temporary license is shorter than the previous one was not disclosed but one can only suspect that ZTE may not be minding its manners in the way that BIS would like to see.

The problem for U.S. exporters is that such a short license, with the real possibility, given its shortened length, that it may not be renewed beyond August 30, opens up the possibility that the exporter will sell items to ZTE that it may not later be able to service even though the warranty on those items is still in force. If the temporary general license is not renewed and ZTE stays on the list, the ability of the U.S. exporter to send replacement parts to ZTE or, alternatively, to repair the item in the United States and return it to ZTE will be in question. It would not surprise me if the temporary general license does not get much use.

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Copyright © 2016 Clif Burns. All Rights Reserved.
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Mar

22

Easy Come, Easy Go, Easy Return: ZTE Temporary General License Issued


Posted by at 11:28 am on March 22, 2016
Category: BISEntity List

ZTE Stand 6 via http://www.zte.com.cn/cn/events/ces2013/show/201301/t20130110_381605.html [Fair Use]According to the Federal Register public inspection files, BIS will publish on March 24, a temporary general license authorizing exports to ZTE Corporation and ZTE Kangxun under the same terms and conditions as were in place prior to the order placing those two companies on the Entity List. This means that, effective March 24, licenses won’t be required for exports to these two entities unless licenses are otherwise required based on the exported item or the proposed end use. The temporary general license, which expires on June 30, 2016, does not include Beijing 8-Star or ZTE Parsian, which were included in the initial designation of ZTE entities.

The problem with the temporary general license is that there is no assurance that BIS will extend the license beyond that date. If an exporter relying on this license, exports an item to ZTE before June 26 but the license is then revoked, the exporter will be effectively excluded from warranty service on that item. Exporters shipping to ZTE during this regulatory limbo would be well advised to make sure that their contracts with ZTE are modified to prevent warranty claims by ZTE if the general license should, at any time, be revoked.

Photo Credit: ZTE Stand 6 via http://www.zte.com.cn/cn/events/ces2013/show/201301/t20130110_381605.html [Fair Use]

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Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Aug

20

The Consolidated Screening List Isn’t


Posted by at 9:01 pm on August 20, 2014
Category: BISCompliance Programs and ProceduresDDTCDebarred ListDenied Party ListEntity ListOFACRussia SanctionsSanctionsSDN ListUnverified List

PortShip by USDA (cropped) via https://www.flickr.com/photos/usdagov/9715983721 [CC BY 2.0 https://creativecommons.org/licenses/by/2.0/]The U.S. Government, over at export.gov, provides a so-called Consolidated Screening List, which you might think would be a one-stop shopping list for your screening needs, something that might be useful if you or your company does not subscribe to or implement one of the commercial screening solutions. Unfortunately, the Consolidated Screening List doesn’t consolidate all the lists you should review and has other significant limitations.

The good news is that the list now does include the Foreign Sanctions Evaders List, which was not included for some time after the list was adopted by Treasury back in February of this year. The description of the list still does not mention the FSE list, but the entries on that list have been quietly added.

However, two other Treasury Department lists are still not included. The relatively new Sectoral Sanctions Identifications List is missing as action. U.S. persons are forbidden from engaging certain transactions with entities on this list, including providing credit in excess of ninety days. Part of the reason for this is probably that the “consolidated” list is infrequently updated. The last update of the list was almost two months ago, on June 26, 2014.

In addition, the Palestinian Legislative Council List, adopted back in 2006, is not included. U.S. financial institutions must reject (not block) transactions with people on the PLC list.

Not only is the “consolidated” list not complete or consolidated, but also it is dangerous to rely on it alone for another significant reason. The search page for the list only retrieves literal matches and does not allow address searching. In addition to searching the consolidated list, you should also rely on OFAC’s sanction list search tool. That tool uses, fairly successfully, “fuzzy logic” to retrieve similarly spelled names. Because many of the names on the list are transliterated versions of Arabic names, meaning that there are many alternate spellings, the “fuzzy logic” will be somewhat more successful in identifying alternate spellings.

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Copyright © 2014 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

29

Bad Times for Timchenko


Posted by at 9:45 pm on April 29, 2014
Category: BISEntity ListOFACRussia SanctionsSanctionsSDN List

Gennady Timchenko via http://www.timchenkofoundation.org/en/about/trustees/1/ [Fair Use]The Bureau of Industry and Security (“BIS”) yesterday added thirteen companies to the Entity List as part of new sanctions against Russia. Many of these companies are connected to Gennady Timchenko who was added to the SDN List in the first round of sanctions and whom we have discussed previously on this blog. Under the Export Administration Rules, licenses are required for exports of all items “subject to the EAR” (i.e., U.S. origin items or foreign produced items with specified percentages of U.S. content) to anyone placed on the Entity List. BIS has said that there will be a presumption of denial for license applications to export items to the thirteen companies newly added to the list.

The companies added to the entity list are the following:

Stroytransgaz Holding, located in Cyprus; Volga Group, located in Luxembourg and Russia; and Aquanika, Avia Group LLC, Avia Group Nord LLC, CJSC Zest, Sakhatrans LLC, Stroygazmontazh, Stroytransgaz Group, Stroytransgaz LLC, Stroytransgaz-M LLC, Stroytransgaz OJSC, and Transoil, all located in Russia.

The Volga Group is owned by Timchenko and itself owns Aquanika, Avia Group, Avia Group Nord, Transoil, Sakhatrans and Stroytransgaz. The only company on the list not connected to Timchenko is CJSC  Zest, which is a leasing company owned by Rossiya Bank.

Interestingly, if you are on pins and needles about whether Justin Timberlake will perform at Hartwall Arena in Finland, the Volga Group, owned by Timchenko, is the vehicle by which Timchenko owns 50 percent of Hartwell Arena. Volga Group, like all of the thirteen companies listed above that have been added to the Entity List, was added yesterday by the Office of Foreign Assets Control to the SDN List. So Justin Timberlake fans planning on heading to Helsinki might want to see if they can get refunds.

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Copyright © 2014 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

May

20

UMass Lowell Fined For Entity List Violations


Posted by at 4:54 pm on May 20, 2013
Category: BISEntity List

SUPARCO HQ http://www.suparco.gov.pk/assets/images/hq.jpg [Fair Use]Back in April the University of Massachusetts at Lowell (the “University”) agreed to pay to the Bureau of Industry and Security (“BIS”) a suspended penalty of $100,000 in connection with its unlicensed export of an atmospheric sensing device, antennae and cables valued at slightly more than $200,000 to Pakistan’s Space and Upper Atmosphere Research Commission (“SUPARCO”). The fine will be waived if the university does not commit any more export violations during a probationary period of two years.

The items at issue were all classified as EAR99. The violation occurred because SUPARCO is on BIS’s Entity List. The licensing policy for SUPARCO has a presumption of approval for EAR99 items, so had the university applied for a license for these exports, it almost certainly would have been granted.

The atmospheric sensing device is likely the basis for this research paper titled “Study of maximum electron density NmF2 at Karachi and Islamabad during solar minimum (1996) and solar maximum (2000) and its comparison with IRI” and co-authored by employees of SUPARCO and a professor at the University. This paper raises an interesting deemed export issue since transfer of technology, even EAR99 technology, would be a violation of the EAR unless the transferred technology was “publicly available” or if it qualifies as “fundamental research.” It is not always easy to determine whether discussions with foreign persons on the Entity List fall within these exceptions, so cooperative projects with such persons by a university will always entail more than a modicum of risk.

 

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)