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Commission draft guidance on export control ICPs

EU CommissionThe European Commission has published draft guidance on the core elements that should be included in Internal Compliance Programmes (ICPs) for compliance with EU and national dual-use export control laws and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.

UK publishes ‘no deal’ Brexit guidance on exporting controlled goods

UK Gov.jpg

The UK government has published a Technical Notice informing stakeholders on how export controls will be affected in the event that the UK leaves the EU with ‘no deal’. It explains (inter alia):

  • How export licensing requirements for different groups of items would change;
  • What the UK government would do to simplify licensing; and
  • Where exporters of military and dual-use items, civilian firearms, and other goods can find relevant information.

The Notice states that a ‘no deal’ situation “remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome”, but that it is the duty of a responsible government “to prepare for all eventualities, including ‘no deal’, until [it] can be certain of the outcome of those negotiations”.

US sanctions 44 Chinese entities over national security threat

China-US.jpgLast week, the US Department of Commerce’s Bureau of Industry and Security (BIS) added 44 Chinese entities (8 entities and 36 subordinate institutions) to the Entity List for “acting contrary to the national security or foreign policy interests of the United States”. Some were specifically listed for their involvement in the “illicit procurement of [US-origin] commodities and technologies for unauthorized military end-use in China”.

For all 44 entities, BIS has imposed a licence requirement for all items subject to the Export Administration Regulations, and a licence review policy of presumption of denial. The licence requirements apply to any transaction in which items are to be exported, re-exported or transferred (in-country) to any of the 44 entities or in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end-user. In addition, no licence exceptions will be available for exports, re-exports or transfers (in-country) to the entities. See Final Rule in the US Federal Register (contains the list of the 44 Chinese entities).

UK updates 12 general licences to clarify security provisions

ECOThe UK’s Export Control Joint Unit (ECJU) has amended 12 military and dual-use Open General Export Licences (OGELs) to confirm, where applicable, that the requirement for a written letter of clearance to comply with the security conditions and requirements of the OGEL can be fulfilled by holding an approved F1686. The F1686 procedure itself and actions required to obtain one have not changed. See ECJU Notice here (includes the list of OGELs updated).

US lifts ban on ZTE after payment of $1.4billion settlement

ZTE2Last week (13 July 2018), the US Department of Commerce announced that Chinese telecoms company ZTE (Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd) had placed $400 million in escrow at a US bank and, as a result, the Department had lifted the 7-year denial order on ZTE pursuant to the $1.4 billion settlement agreement approved last month (see our previous blog for the full details of that new agreement).