The Consolidated Screening List Isn’t
Posted by Clif Burns at 9:01 pm on August 20, 2014
Category: BIS • Compliance Programs and Procedures • DDTC • Debarred List • Denied Party List • Entity List • OFAC • Russia Sanctions • Sanctions • SDN List • Unverified List
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.
Bad Times for Timchenko
Posted by Clif Burns at 9:45 pm on April 29, 2014
Category: BIS • Entity List • OFAC • Russia Sanctions • Sanctions • SDN List
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.
UMass Lowell Fined For Entity List Violations
Posted by Clif Burns at 4:54 pm on May 20, 2013
Category: BIS • Entity List
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.
T-Platforms Placed on Entity List; SUNY No Longer Feels Sunny
Posted by Clif Burns at 8:11 pm on April 18, 2013
Category: BIS • Entity List
Some tech writers have just discovered the Bureau of Industry and Securities’ Entity List and they are, well, perplexed. Arstechnica, Slashdot and HPC Wire all weighed in on the mysterious list, with all three expressing some surprise that U.S. companies could no longer supply components to T-Platforms, the Russian supercomputer manufacturer that BIS put on the Entity List back in March.
The BIS notice putting T-Platforms on the Entity List cited two rationales. First, the company had received shipments of a number of export-controlled items that had been shipped without the required licenses. Second, the notice stated that there was “reason to believe” that T-Platform was involved with the Russian military’s research on nuclear weapons. As a result, BIS stated that all exports of items subject to the EAR would require licenses and that the licensing policy would be a presumption of denial.
By focusing on the impact of the designation on exports of components and hardware to T-Platforms, the articles all missed a more interesting issue. Last year, T-Platforms delivered a supercomputer to the State University of New York at Stony Brook. My educated guess is the SUNY paid a small fortune and expected and received an agreement from T-Platforms that it would provide maintenance and service as needed for the supercomputer.
Uh-oh. To say the least. Somebody at SUNY right now is probably asking who on earth had the bright idea to buy this thing from Russia, because I’m sure that someone has realized by now that most requests for service by T-Platforms of this leviathan would inevitably require that SUNY transfer EAR99 technology to T-Platforms. Such a transfer would occur to the extent that the request would transfer to T-Platforms non-public information on the development, production or use of the computers.
How long before we see SUNY’s new supercomputer on eBay for $19.99 OBO?
Posted by Clif Burns at 6:50 pm on November 17, 2011
Category: BIS • Entity List
This blog reported back in January on the removal of various Indian companies and organizations from the Entity List. This removal eliminated the requirement for licenses for certain exports to the removed companies that might not have otherwise required licenses.
An Indian website today quoted an executive of one of these removed groups who was, it seems, unenthused about the impact of the removal:
“I do not think removal of some DRDO labs from the Entity List by the U.S. has changed anything for us. The American export regulations for dual-use technologies and items need stringent clearances from their commerce and defence departments,” Saraswat [Chief of the Defence Research and Development Organisation ("DRDO")] said when asked if the American policy announced during US President Barack Obama’s visit last November and implemented in January this year had helped India in anyway.
“Whether or now we are with Missile Technology Control Regime (MTCR), the export rules and regulations apply for us. We have to go through the process. It is not an easy process and it becomes difficult to acquire them,” he said.
“Our experience has been these regulations make it more difficult,” he added.
If that’s the case, perhaps Saraswat won’t mind if the U.S. puts DRDO back on the Entity List.