UK chemicals company fined $7k for violating export controls

HMRCA Leicestershire-based company, VWR International Ltd, has been fined a total of £7,039 at City of London Magistrates Court after pleading guilty to 4 counts of exporting goods contrary to a prohibition or restriction. Specifically, VWR illegally shipped 4 consignments of controlled chemicals and metal to foreign jurisdictions without the required export licence. VWR shipped the first consignment days after being denied the necessary licence, and failed to apply for the required licence in relation to the other three consignments. The case was investigated and prosecuted on behalf of HMRC.

UK sentences 3 people for trafficking fighter jet parts to Iran

Parliament8Three individuals – Alexander Samuel George, Paul Robert Attwater, and Iris Louise Attwater – have been convicted in the UK of evading export controls in relation to Iran.

Alexander George, who was sentenced yesterday to 2½ years’ imprisonment, shipped military items to Iran, including Russian MiG and US F4 Phantom parts, through various companies and countries without the appropriate licence. Paul Attwater and his wife Iris, who each received suspended sentences of 6 months’ imprisonment last month, sourced dual-use aircraft parts from the USA and shipped them to Alexander George’s companies in Malaysia and Dubai, which then sent them to Iran.

The offenders were also disqualified from being a company director (9 years for Alexander George, and 6 years each for Paul and Iris Attwater). POCA proceedings will now follow to recover the money made from the criminality. See UK Press Release.

Germany halts all arms sales to Saudi Arabia over Khashoggi killing

Germany - Saudi ArabiaLast month, Germany announced that it will not be approving any new arms exports to Saudi Arabia over the killing of journalist Jamal Khashoggi committed in the Saudi Consulate General, Istanbul (see previous blog).

Yesterday (19 November), Germany’s Minister of Foreign Affairs, Heiko Maas, announced that there will now be a complete ban on all arms sales to Saudi Arabia (including exports that had already been approved by the German government). Furthermore, that Germany has initiated proceedings to impose travel bans on 18 Saudi Arabian nationals allegedly linked to the killing.

Last week (15 November), the US added 17 Saudi Arabian individuals to its Global Magnitsky sanctions list (Executive Order 13818) over “serious human rights abuse resulting from their roles in the killing of Jamal Khashoggi” (see previous blog).

Germany suspends arms exports to Saudi Arabia

Germany - Saudi Arabia.jpgGermany has announced that, until further notice, it will not be approving new arms exports to Saudi Arabia following the killing of journalist Jamal Khashoggi committed within the premises of the Saudi Consulate General in Istanbul. Germany has also urged other EU member states to follow suit. See Joint Statement from France, Germany, and the UK.

The EU will vote later this week on a parliamentary resolution on Mr Khashoggi’s killing, including whether targeted sanctions and an EU arms embargo ought to be imposed on Saudi Arabia.

EU imposes trade sanctions on Cambodia & notifies Myanmar of potential similar action

EU Commission2.jpgLast week (5 October), EU Trade Commissioner Cecilia Malmström announced the EU’s response to the “human rights situation in Myanmar and Cambodia”.

In respect of Cambodia, the EU has given notice that it will launch the process of withdrawing Cambodia from the Everything But Arms (EBA) arrangement, which grants full tariff-free access to the European market for all exports, except arms and armaments.

In respect of Myanmar/Burma, the EU has given notice of its intention to “send an emergency, high-level EU mission to the country in the coming days to assess the situation on the ground. This high-level mission is within the framework of a potential withdrawal of Myanmar from the [EBA] arrangement. There is a clear possibility that a withdrawal could be the outcome.”

The EU has said that it will keep its channels of dialogue with both countries open, and that EU Member States will be kept informed of the next steps.

Commission draft guidance on export control ICPs

EU CommissionThe European Commission has published draft guidance on the core elements that should be included in Internal Compliance Programmes (ICPs) for compliance with EU and national dual-use export control laws and regulations. The Commission has requested feedback on the guidance in an online survey, which closes on 15 November 2018. See UK Notice.

US export restrictions on 15 entities

US Flag3The US Bureau of Industry and Security (BIS) has added 15 entities to the Entity List for “acting contrary to the national security or foreign policy interests of the United States”. The Export Administration Regulations (EAR) restrict their access to US-origin goods (additional licence requirements on, and limits on the availability of most licence exceptions for, exports, reexports, and transfers (in-country) to the listed entities). Measures effective today. See Final Rule in the US Federal Register.

China-based entities Ma Yunong and Seajet Company Limited, and Hong Kong-based entity ZM International Company Ltd. were listed for unlawfully procuring and diverting US-origin armoured vehicles to North Korea, in violation of the EAR.

Four other Hong Kong-based entities, Calvin Law, CLC Holdings Limited, LHI Technology (H.K.) Company Limited, and Ray Hui, were listed for procuring US-origin items for reexport to entities in China and other countries without obtaining the necessary licence(s).

UAE-based Good Luck Shipping LLC was listed for trans-shipping US-origin items to sanctioned destinations without the required authorisations.

Pakistan-based entity Technology Links Pvt. Ltd. was listed for its involvement in the supply of items subject to the EAR to nuclear and missile-related Entity List parties in Pakistan without the required licence.

UAE-based Techcare Services FZ LLC, and UEC (Pvt.) Ltd., located in Pakistan, Saudi Arabia and the UAE, were listed for making multiple attempts to acquire US-origin commodities ultimately destined for Pakistan’s unsafeguarded nuclear programme and for providing false and misleading information to BIS during an end-use check.

Turkey-based entities, Huseyin Engin Borluca and 3K Aviation Consulting and Logistics, along with BVI-based Evans Meridians Ltd., were included for engaging in transactions in violation of the US embargo against Iran by transferring, or attempting to transfer, US-origin aircraft engines to an Iranian customer without the required authorisations.

Russian Joint Stock Company (JSC) NIIME was listed for operating as the de facto research and development branch of PJSC Mikron, a listed entity on the Entity List.

BIS has removed Greece-based entity Top Electronics Components S.A. from the Entity List.

US Russia chemical/biological weapons sanctions come into force

US-Russia3.jpgEarlier this month, the US Department of State determined under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 that “the Russian government ha[d] used chemical or biological weapons in violation of international law or ha[d] used lethal chemical or biological weapons against its own nationals” (previous blog).

This week, on 27 August 2018, a Notice was published in the US Federal Register bringing mandatory sanctions under the Act into force against Russia. They will remain in place for at least 1 year, and consist of:

(1)   Arms Sales: Termination of (a) sales to Russia under the Arms Export Control Act of any defence articles, defence services, or design and construction services, and (b) licenses for the export to Russia of any item on the US Munitions List. This sanction has been waived in relation to the issuance of licenses in support of government space cooperation and commercial space launches (such licenses to be issued on a case-by-case basis).

(2)   Arms Sales Financing: Termination of all foreign military financing for Russia under the Arms Export Control Act.

(3)   Denial of US Government Credit or Other Financial Assistance: Denial to Russia of any credit, credit guarantees, or other financial assistance by any department, agency, or instrumentality of the US Government, including the Export-Import Bank of the US.

(4)   Exports of National Security-Sensitive Goods and Technology: Prohibition on the export to Russia of any goods or technology on that part of the control list established under section 2404(c)(1) of the Appendix to Title 50. There are a number of waivers relating to this sanction, including the areas of flight safety (civil fixed-wing passenger aviation), space flight, and commercial end-users (civil end-uses in Russia).

The fifth mandatory sanction under the Act, namely, termination of foreign assistance to Russia under the Foreign Assistance Act of 1961 (except for urgent humanitarian assistance and food or other agricultural commodities or products), has been waived in its entirety.