NOTICE TO EXPORTERS 2021/13 – MANDATORY USE OF EORI NUMBERS IN LICENCE APPLICATION/REGISTRATION

On 27 September 2021 ECJU issued the following Notice to Exporters Listed as 2021/13:

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OFFICE OF FOREIGN ASSETS CONTROL (OFAC) ANNOUNCES PENALTIES AGAINST UK BANKS FOR BREACHES OF US SANCTIONS

First Bank SA, located in Romania, and its U.S. parent company, JC Flowers & Co., have agreed to remit $862,318 to settle potential civil liability for First Bank’s processing of transactions in apparent violation of OFAC’s Iran and Syria sanctions programs.  Specifically, First Bank processed 98 commercial transactions totalling $3,589,189 through U.S. banks on behalf of parties located in Iran and Syria.  In 2018, after JC Flowers acquired a majority ownership interest in First Bank, First Bank processed Euro-denominated payments for persons located in Iran.  The settlement amount reflects OFAC’s determination that the apparent violations were voluntarily self-disclosed and non-egregious.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today (26 August 2021)announced a $2,329,991 settlement with Bank of China (UK) Limited, a financial institution located in London, United Kingdom.  BOC UK has agreed to remit $2,329,991 to settle its potential civil liability for processing transactions in apparent violation of OFAC’s now-repealed Sudan sanctions program, which prohibited the exportation, directly or indirectly, to Sudan of any goods, technology, or services from the United States. Specifically, between September 4, 2014 and February 24, 2016, BOC UK exported financial services from the U.S. by processing 111 commercial transactions totalling $40,599,184 through the U.S. financial system on behalf of parties in Sudan. This settlement amount reflects OFAC’s determination that BOC UK’s self-identified apparent violations were voluntarily self-disclosed and constitute a non-egregious case.

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NOTICE TO EXPORTERS 2021/10

On 18 August 2021 ECJU issued the following Notice to Exporters Listed as 2021/10:

Further to the situation in Afghanistan, the Export Control Joint Unit (ECJU) has removed Afghanistan as a permitted destination from 5 open general export licences.

You are no longer able to use these licences to export to Afghanistan. You should apply for standard individual licences (SIELs) instead.

The affected licences are:

• OGEL (export after exhibition: dual-use items)
• OGEL (export for repair/replacement under warranty: dual-use items) from December 2019
• OGEL (export for repair/replacement under warranty: dual-use items)
• OGEL (X) – from December 2019
• OGEL (X)

The full NTE may be accessed at: https://www.gov.uk/government/publications/notice-to-exporters-202110-ogels-amended-to-exclude-afghanistan/nte-202110-ogels-amended-to-exclude-afghanistan

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UPDATED  GUIDANCE – INTERCEPTION AND MONITORING PROHIBITIONS IN SANCTIONS MADE UNDER THE SANCTIONS AND ANTI-MONEY LAUNDERING ACT 2018: TECHNICAL GUIDANCE 

On 9 August 2021 the Export Control Joint Unit (ECJU) published guidance relating to the meaning of specific terms used in the UK sanctions regulations relating to Belarus, Myanmar, Iran, Syria and Venezuela when addressing items that could be used to intercept communications, as listed in the respective schedules.

The full guidance may be found at: https://www.gov.uk/government/publications/interception-and-monitoring-prohibitions-in-sanctions-technical-guidance/interception-and-monitoring-prohibitions-in-sanctions-made-under-the-sanctions-and-anti-money-laundering-act-2018-technical-guidance

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NOTICE TO EXPORTERS 2021/08

On 2 August 2021 ECJU issued the following Notice to Exporters Listed as 2021/08:

UPDATED  GUIDANCE – COMPLIANCE WITH CYBER SECURITY REQUIREMENTS FROM OTHER NATIONS

Industry Security Notice (ISN) 2021/03 provides an update regarding IT security requirements of foreign governments, which will be of interest to those considering DFARS and CCMC in particular:

Industry Security Notice Number 2021/03

Introduction

1. The UK Defence Supply Base (DSB) is required to comply with the Information and Cyber Security requirements of the UK Ministry of Defence (MOD).

Issue

2. This ISN provides interim instructions for the DSB as to how to address contractual requirements, in order to:

a) assess or certify compliance with the Information and Cyber Security requirements of other nations (such as those set out in the US Defense Federal Acquisition Regulation Supplement (DFARS)/ Cybersecurity Maturity Model Certification (CMMC) requirements); and

b) provide representatives of other nations with access to information or equipment on DSB information systems and IT networks, in order to investigate cyber security incidents.

Status

3. This ISN 2021/03 replaces ISN 2018/04 (Interpretation of US DFARS Clauses in relation to CDI and Cyber Reporting).

UPDATED ECJU GUIDANCE –USE OF OPEN LICENCES FOR EXPORTING STRATEGICALLY CONTROLLED ITEMS

On 11th June 2021 ECJU published updated guidance regarding delays at the UK border arising from incorrect licence references being provided on export documentation for dual-use items.

The updated guidance in full may be found at:

https://www.gov.uk/government/publications/notice-to-exporters-202107-licences-for-strategically-controlled-items/nte-202107-licences-for-strategically-controlled-items

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UPDATED ECJU GUIDANCE – F680 EXPRESS APPLICATIONS

On 8th June 2021 ECJU published updated guidance regarding F680 express applications.

The updated guidance in full may be found at:

https://www.gov.uk/government/publications/notice-to-exporters-202106-f680-express-applications/nte-202106-f680-express-applications

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UPDATED ECJU GUIDANCE – CHANGES TO EXPORT CONTROL ORDER 2008

On 8th June 2021 ECJU published updated guidance regarding changes to the Export Control Order 2008.

There are changes to:

• Schedule 2 (military goods, software and technology)
• Schedule 3 (UK controlled dual-use goods, software and technology)

The new order, The Export Control (Amendment) Order 2020 (SI 2021 No.586) comes into force on 7 June 2021. The order implements changes to the list of defence-related products. These reflect changes to the Wassenaar Arrangement munitions list.

The Order also fixes minor drafting errors.

Changes to Schedule 2:

• changes to definitions, changes to ML1, ML2, ML6, ML8, ML10, ML11, ML13, ML15, ML17, ML18, and ML21

Changes to Schedule 3:

• changes to definitions, changes to PL9009

ECJU will update the consolidated list of strategic military and dual-use items that require export authorisation in due course.

UPDATED ECJU GUIDANCE ON EXPORT CONTROLS APPLYING TO ACADEMIC RESEARCH

On 31st March 2021 ECJU updated the long standing guidance regarding exports of technology applying to academic research.

The guidance is summarised as:

This guidance is for academics or those doing postgraduate research in fields where there is a high risk it could be used for military purposes. This includes the development, production, use or delivery of weapons of mass destruction (WMD).

It explains:

• how to assess if the UK’s export controls apply
• when your research might be exempt
• how to check whether you need an export licence

UK strategic export controls focus on high risk activities, such as applied research and could affect your activities if you:

• work with colleagues overseas on research projects
• take your research overseas
• export your technology

The guidance in full may be found at: https://www.gov.uk/guidance/export-controls-applying-to-academic-research#overview

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PRINCETON UNIVERSITY SETTLES WITH BIS FOR UNLICENSED EXPORTS OF PATHOGENS – INCLUDING TO UK

According to a Settlement Agreement in the amount of $54,000 published by the Bureau of Industry and Security in February 2021, “On 37 occasions between on or about November 11, 2013, and on or about March 5, 2018, Princeton University engaged in conduct prohibited by the Regulations when it exported various strains and recombinants of an animal pathogen, items subject to the Regulations, from the United States to various overseas research institutions, without the BIS licenses required by Section 742.2 of the Regulations. The items were classified under Export Control Classification Number (” ECCN” ) 1C351, 1C352 or 1C353, controlled for Chemical and Biological Weapons reasons, and valued in total at approximately $27,000.”  Several of these exports were to UK recipients.

This is likely to increase the recent focus by UK authorities on export control compliance in academia, particularly in the area of potentially WMD related activities.

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UPDATED GUIDANCE ON SANCTIONS & EMBARGOES

On 18 February 2021 ECJU published updated guidance on trade sanctions, arms embargoes and trade restrictions, including trade controls, transit controls and restrictions on terrorist organisations.

Full details at the link below:

https://www.gov.uk/guidance/current-arms-embargoes-and-other-restrictions

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NOTICE TO EXPORTERS 2020/22 GENERAL TRADE LICENCE RUSSIA SANCTIONS 

On 8 January 2021 ECJU issued the following Notice to Exporters Listed as 2020/22:

UPDATED CONSOLIDATED EXPORT CONTROL LIST EFFECTIVE FROM TODAY (15 DEC 2020)

The UK consolidated list of strategic military and dual-use items that require export authorisation is republished following amendments to the EU dual-use export control list in Annex I to Regulation (EC) No 428/2009, which comes into force today, 15 December 2020.

The full list may be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/944003/UK_strategic_export_control_lists_20201215.pdf

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UK GOVERNMENT ISSUES NOTICE TO EXPORTERS 2020/19: EU Transition and SPIRE

At 11pm on 31 December 2020 the transition periods ends and EU export control law ceases to apply in Great Britain (England, Scotland and Wales).

EU regulations and directives relating to strategic export controls will continue to apply in Northern Ireland. This is as a result of the Northern Ireland Protocol which forms part of the Withdrawal Agreement between the UK and the EU.

The rules that will apply to controlled exports will depend on whether the items are exported from Great Britain or from Northern Ireland.

1. What you need to know

In preparation for the end of transition changes, SPIRE, the online export licensing system will be unavailable on 31 December 2020 to allow for essential system updates.

In connection with these changes, you may receive Requests for Further Information regarding current licence applications in order to ensure that we are able to issue the correct licence from 1 January 2021.

The Export Control Joint Unit (ECJU) will issue further guidance on export controls and the end of transition period in due course.

2.  Action to take

With immediate effect and in order to ensure that we are able to issue the correct licence from 1 January 2021, a response to the following questions on your current application are/is required.

Where stated on your application form that the location of your items is the ‘UK’, please could you confirm if the items are located in either ‘Northern Ireland’ or ‘Great Britain’.

Where stated on your application form that a third party is located in the ‘UK’, please could you confirm that the third party is located in either ‘Northern Ireland’ or ‘Great Britain’.

Where stated on your application form that an ‘Ultimate End User’ is in the UK, please could you confirm that the Ultimate End User is located in either ‘Northern Ireland’ or ‘Great Britain’.

Where stated on your application form that the item recipient (consignee or End User) is located in the UK, please could you confirm if the recipient is located in either ‘Northern Ireland’ or ‘Great Britain’.

If possible, please provide this information within SPIRE via Supplementary Information, and E-Mail your case officer once this has been done. If you do not take this action when applying, we will have to write to you separately and this might cause delays to processing your application.

In providing this information you give permission for ECJU to update your application on your behalf.

These actions will be put in place regardless of the EU negotiations outcome.

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UK GOVERNMENT ISSUES NOTICE TO EXPORTERS 2020/16: UK Exporters Fined for Unlicensed Exports

Between March and September 2020, HM Revenue and Customs (HMRC) received compound settlements totalling £700,368.01. The 19 settlements were between £1,000 and £211,250. These related to unlicensed exports of dual use goods, military goods and related activity controlled by the Export Control Order 2008.

HMRC have policy responsibility for enforcing export controls on strategic goods and sanctions and investigating breaches of those controls. Where appropriate, HMRC can use their powers to offer a compound settlement in lieu of prosecution.

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UK GOVERNMENT ISSUES NOTICE IN RELATION TO POST-BREXIT “BLOCKING STATUTE”

Background

After the end of the transition period, the Blocking Regulation (Council regulation (EC) 2271/96) and Implementing Regulation (Commission Implementing Regulation (EU) 2018/1101) will form part of the retained EU law applying in the UK. This is by virtue of the European Union (Withdrawal) Act 2018. It is intended that the Protecting against the Effects of the Extraterritorial Application of Third Country Legislation (Amendment) (EU Exit) Regulations 2019 will come into force on 1 January 2021.

These regulations amend the domestic legislation implementing the Blocking Regulation (the Protection of Trading Interests Order), the retained Blocking Regulation and the retained Implementing Regulation. This is so that they are legally operable in the UK. The retained EU regulations and the domestic implementing legislation, as amended, together form the UK’s ‘Protection of Trading Interests Legislation’. Until 11pm on 31 December 2020, EU law applies.

The full Notice may be found at: https://www.gov.uk/guidance/protection-of-trading-interests-retained-blocking-regulations-from-1-january-2021

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UK GOVERNMENT ISSUES NOTICE TO EXPORTERS 2020/15: Contacting the MOD Team in ECJU

Some exporters are sending correspondence to out of date team contacts and email addresses. As a result, the Ministry of Defence (MOD) team in Export Control Joint Unit (ECJU) are not receiving these requests, which means that a response cannot be sent.

With immediate effect all requests from exporters for open general export licence (OGEL) approval letters, Crown Exemption letters and all enquiries of a general nature about MOD Form 680 applications should only be sent to:

ECJU-MODTeam@mod.gov.uk

Enquiries will be acknowledged and actioned by a named Desk Officer in the MOD Team.

There are 3 types of OGEL that require UK exporters to obtain an approval letter from the MOD. These are:

• UK government defence contracts, military goods
• collaborative Project Typhoon and military goods
• collaborative project A400M

If exporters continue to encounter difficulties in contacting the MOD Team, then please telephone the ECJU Helpline on 020 7215 4594.

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 UK GOVERNMENT ISSUES REMINDER OF CURRENT AND POST-TRANSITION SANCTIONS 

UK Sanctions Regimes

Information on other trade restrictions that don’t fall under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) can be found on the Department for International Trade pages.

Find out who is subject to UK sanctions under the Sanctions Act

Find out who is subject to financial sanctions under the Sanctions Act, EU legislation and other UK legislation.

UK sanctions regimes currently in operation under the Sanctions Act.

Global human rights

UK sanctions regimes which will come into force at the end of the transition period.

Thematic

Chemical weapons

Counter-terrorism

Counter-terrorism (International)

Cyber

ISIL (Da’esh) and Al-Qaida

Country

A

Afghanistan

B

Belarus

Bosnia and Herzegovina

Burma (Myanmar)

Burundi

C

Central African Republic

D

Democratic People’s Republic of Korea

Democratic Republic of the Congo

G

Guinea

Guinea-Bissau

I

Iran (human rights)

Iran (nuclear)

Iraq

L

Lebanon

Lebanon (Assassination of Rafiq Hariri and others)

M

Mali

N

Nicaragua

R

Russia

S

Somalia

South Sudan

Sudan

Syria

V

Venezuela

Y

Yemen

Z

Zimbabwe

More information

For more information on financial sanctions, contact the Office of Financial Sanctions Implementation at OFSI@hmtreasury.gov.uk or subscribe to OFSI’s e-alerts.

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EU ANNOUNCES 2020 UPDATES TO DUAL-USE LIST

On 7 October 2020, the European Commission adopted the annual Delegated Regulation that updates the EU dual-use export control list in Annex I to Regulation (EC) No 428/2009. This brings it in line with the decisions taken within the framework of the international non-proliferation regimes and export control arrangements in 2019 and until end of February 2020 (in order to take into account the decisions taken in the Australia Group in February 2020). The majority of the changes result from amendments agreed at the Wassenaar Arrangement, but important changes also reflect the decisions taken in the Australia Group in February 2020.

The European Parliament and Council have two months in which to object to the delegated act before it enters into force.

Exporters should take this opportunity to review their exports of goods, software and technology to ensure future compliance.

Of particular note, those UK companies who currently transfer Annex I dual-use items to other EU member states without the need for export licences will require licences after the Brexit transition period ends.

The Comprehensive Change Note detailing these pending changes can be viewed at: https://trade.ec.europa.eu/doclib/docs/2020/october/tradoc_158972.pdf

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BRITISH NATIONAL ARRESTED AT PENSACOLA INTERNATIONAL AIRPORT PLEADS GUILTY TO NATIONAL SECURITY OFFENSES

United States Attorney Lawrence Keefe, of the Northern District of Florida, announced on 1^st September 2020 that Colin Fisher, a citizen of the United Kingdom, pleaded guilty to federal charges of violating the International Emergency Economic Powers Act (“IEEPA”) and attempted smuggling in relation to exporting power generating equipment to Iran. Fisher was arrested by federal agents when he arrived in Pensacola from the United Arab Emirates earlier this month to consummate the illegal transaction and get equipment for a buyer in Iran.

Fisher, 45, admitted in United States District Court in Pensacola that from October 1, 2017, to August 7, 2020, he worked to violate the Iranian embargo by attempting to export a Solar Mars 90 S turbine core engine and parts from the United States for delivery to an end user in Iran. This included participating in fraudulent invoicing and using coded language with conspirators to communicate about the illegal transactions. Despite these efforts, law enforcement authorities discovered the plan and were able to seize the turbine before its transatlantic journey to the end user in Iran, a conspirator in Iran who is linked to an Iranian energy company. The intercepted turbine, which was valued at half a million dollars, could be used to provide needed energy to the oil fields of Iran.

“Exporting technology to Iran is prohibited for a very good reason, yet this defendant chose to put his own self-interest above global and national security,” U.S. Attorney Keefe said. “This case should send a clear signal that the United States cannot and will not look the other way when persons endanger the safety of our nation and its people. We will enforce these laws, which are vital to our national security, against those both within the United States and abroad.”

James Meharg, CEO and president of Turbine Resources International, LLC, in Pensacola, was previously convicted of conspiring with Fisher to export a large turbine and parts from the United States to an Iranian recipient in violation of the Iranian Transactions and Sanctions Regulations.  Meharg is currently serving a 40-month sentence in federal prison.

“The commitment of the Bureau of Industry and Security to protect our nation’s security against terrorist procurement networks in State Sponsors of Terrorism countries such as Iran remains unwavering,” said P. Lee Smith, Performing the Non-exclusive Functions and Duties of the Assistant Secretary for Export Enforcement in the Department of Commerce’s Bureau of Industry and Security. “These continued efforts to bring all conspirators to justice are demonstrated in this most recent guilty plea.”

Assistant United States Attorney David L. Goldberg has prosecuted the case following a joint investigation by the United States Department of Commerce’s Bureau of Industry and Security along with the Federal Bureau of Investigation.

Fisher faces up to 20 years imprisonment for violating the International Emergency Economic Powers Act and up to 10 years imprisonment for attempted smuggling. A sentencing date has been set for November 10, 2020, at 9:00 a.m. at the United States Courthouse in Pensacola.

Changes to OGELs/OGTCLs

On 2 September 2020, the Department for International Trade issued updated guidance for companies trading or wishing to trade with Iran.

Changes to OGELs/OGTCLs

On 4 August 2020, the Department for International Trade issued Notice to Exporters (NTE) 2020/13.

The following licences are no longer available for exports to or trade with Hong Kong.

• OGEL (chemicals)
• OGEL (chemicals) from December 2019
• OGEL (cryptographic development)
• OGEL (cryptographic development) from December 2019
• OGEL (export after repair/replacement under warranty: dual-use items) from June 2019
• OGEL (export after repair/replacement under warranty: dual-use items)
• OGEL (information security items)
• OGEL (information security items) from December 2019
• OGEL (military and dual-use goods: UK forces deployed in non-embargoed destinations)
• OGEL (military and dual-use goods: UK forces deployed in non-embargoed destinations) from December 2019
• OGEL (export for exhibition: military goods)
• OGEL (export for exhibition: military goods) from December 2019
• OGEL (export for repair/replacement under warranty: military goods)
• OGEL (export for repair/replacement under warranty: military goods) from December 2019
• OGEL (historic military goods)
• OGEL (historic military goods) from December 2019
• OGEL (military goods: for demonstration)
• OGEL (military goods: for demonstration) from December 2019
• OGEL (PCBs and components for military goods)
• OGEL (PCBs and components for military goods) – from June 2019
• OGTL (sporting guns)
• OGTCL (maritime anti-piracy)

Revoked OGELs

The following open general licences have been revoked as Hong Kong was the only permitted destination:

• OGEL (dual-use items: Hong Kong Special Administrative Region)
• OGTL (dual-use goods: Hong Kong Special Administrative Region)

Standard individual licence (SIL) applications should be submitted for future exports to or trade with Hong Kong.

The Department of State is updating the public guidance for Section 232 on July 15, 2020, to expand the focus of implementation of Section 232 to address certain growing threats to U.S. national security and foreign policy interests related to Russian energy export pipelines, particularly with respect to Nord Stream 2 and the second line of TurkStream.  Russia uses its energy export pipelines to create national and regional dependencies on Russian energy supplies and leverages these dependencies to expand its political, economic, and military influence and undermine U.S. national security and foreign policy interests.

In this context, Nord Stream 2 and the second line of TurkStream – both of which are under construction – could undermine Europe’s energy security by maintaining Russia’s dominant share in Europe’s gas markets for decades, discouraging investment in critical diversification projects, and limiting the ability of European countries to gain leverage over Russia on issues of price, commercial transparency, and the environment.  These projects could destabilize the Ukrainian economy and government by severely limiting gas transit through Ukraine, thereby depriving the Ukrainian government of significant transit revenues and reducing a large deterrent against further Russian aggression against Ukraine.  The development of these projects also provides Russia with vehicles to further spread its malign influence in Europe.