Licensing

Nearly $500,000 of forfeited proceeds of an illicit machine tool sale to Russian buyers will be used to support a drone-based program to assess the damage Russian aggression has done to Ukraine’s electrical distribution and transmission infrastructure. Deputy Attorney General Lisa Monaco and Estonian Secretary General Tõnis Saar announced  the transfer at the Munich Security Conference Saturday Feb 17.

Deputy Attorney General Lisa O. Monaco delivered remarks on "the Promise and Peril of AI," at Oxford University February 14, calling  an "inflection point with AI," Claiming that "AI is the ultimate disruptive technology," she vowed that the Distruptive Technology Strike Force established last year to coordinate export control activities, will place AI at the "very top" of its enforcement priority list.

A Montreal woman pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unnamed aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia.  Last October, a criminal complaint was unsealed, and a Brooklyn, New York, resident and two Canadian nationals were arrested in connection with a global procurement scheme in which the defendants used two corporate entities registered in Brooklyn to unlawfully source and purchase dual-use electronics on behalf of end-users in Russia, including companies affiliated with the Russian military.

A 747 Boeing Freighter was flown to Miami from Buenos Aires by U.S. Marshalls in the latest chapter of the Mahan Air Saga.  Mahan, a sanctioned Iranian airline is affiliated with the Islamic Revolutionary Guard Corp-Qods Force (IRGC-QF), a designated Foreign Terrorist Organization (FTO). On Oct. 20, 2022, in support of its ongoing criminal investigation, the United States filed a civil forfeiture complaint alleging that the aircraft’s transfer from Mahan Air to Empresa de Transporte Aéreocargo del Sur, S.A. (EMTRASUR), a Venezuelan cargo airline and subsidiary of a Venezuelan state-owned company, violated U.S. export control laws.

In two separate cases out of U.S. Attorneys’ Offices on opposite coasts, several individuals are charged – one of whom was arrested yesterday – in connection with sophisticated schemes to transfer sensitive technology, goods, and information for the benefit of hostile foreign adversaries, in violation of U.S. law. In the Eastern District of New York, a fugitive father and son team of Iranian nationals are charged with conspiring to export equipment used in the aerospace industry to the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), in connection with an alleged conspiracy to illegally export U.S. goods and technology without the required licenses. In the Central District of California, a naturalized chinese was arrested for allegedly stealing trade secrets developed for use by the U.S. government to detect nuclear missile launches and track ballistic and hypersonic missiles.

Commerce Secretary Gina Raimondo has announced the creation of the U.S. AI Safety Institute Consortium (AISIC), which will unite AI creators and users, academics, government and industry researchers, and civil society organizations in support of the development and deployment of safe and trustworthy artificial intelligence (AI). The consortium will be housed under the U.S. AI Safety Institute (USAISI) and will contribute to priority actions outlined in President Biden’s Executive Order, including developing guidelines for red-teaming, capability evaluations, risk management, safety and security, and watermarking synthetic content.

The proposed rule would amend the Bureau of Industry and Security’s (BIS) Defense Priorities and Allocations System (DPAS) regulation by providing administrative changes to well-established standards and procedures. This proposed rule would: clarify existing standards and procedures by which BIS may provide Special Priorities Assistance (SPA); revise Schedule I to provide transparency and differentiation between other departments’ priorities jurisdiction and the Department of Commerce’s jurisdiction; and provide technical edits to reflect certain non-substantive updates since the DPAS regulation was last amended in 2014, including providing updated contact information, legal citations, and definitions.

Four Chinese nationals are charged in an indictment in the District of Columbia with various federal crimes related to a years-long conspiracy to unlawfully export and smuggle U.S.-origin electronic components from the United States to Iran.

The primary focus of Commerce's export enforcement activities this year will be high-profile cases coordinated with other agencies, both in the US and in league with allied counterparts. In a discussion sponsored by Baker McKenzie January 30, Assistant Secretary for Export Enforcement Matt Axelrod shared his thoughts on the evolving state of Export Control, and his expectations for the coming year.

The European Commission has  issued new Guidelines on data gathering and processing on export controls.   This follows the Commission White Paper on export controls, released Thursday 25 January, which highlights the need to fully implement the EU’s dual-use regulation. The Guidelines set out in detail the process for the collection of licensing data by the European Commission and the competent authorities of the Member States. The White Paper suggests several measures, including the reinforcement of uniform controls in the EU, establishing a forum for political coordination on export controls, enhancing the coordination of new National Control Lists, and moving forward the evaluation timeline of the Dual-use Regulation.

A group of Democratic lawmakers has called for the Commerce Department to strengthen export controls and end-use checks for firearm exports. The letter comes as Commerce prepares for the expiration of its 90-day pause on export approvals of certain firearms and related components. 

Commerce officials announced the arrrest of a Los Angeles man for his alleged involvement in a years-long scheme to secure and unlawfully export sensitive technology from the United States for the benefit of a Russian business. 

Commerce’s Bureau of Industry and Security (BIS) is conducting a comprehensive assessment of the use of mature-node semiconductor devices (legacy chips) in the supply chains that support—directly or indirectly—U.S. national security and critical infrastructure.

Assistant Secretary for Export Enforcement Matt Axelrod announced enhancements and expansions of the Bureau's Voluntary Self-Disclosure program, including simplified reporting, e-mail submittals and expedited handling of corrective action for unlawfully exported items. In a speech January 16 at NYU School of Law’s Program on Corporate Compliance and Enforcement Mr. Alelrod described the changes, along with an engaging history of the jukebox, details of which can be found in the complete speech.  

The Commerce Department plans to announce a department-wide national security strategy in the coming weekS to address major priorities and move forward on its mission to “protect, promote and preserve our national security,” according to Deputy Secretary Don Graves. Commerce is playing a greater role in protecting national security than ever before, Mr. Graves said. “New landmark legislation has made it possible for us to meet our major national security challenges head-on – from chips and semiconductors to revitalizing America's industrial base and unleashing technology innovation. And we are looking to sustain and expand that role in the days ahead.” He spoke at the launch of the National Foreign Trade Council’s Alliance for National Security and Competitiveness. The Deputy Secretary offered no details about the upcoming strategy. But he told the gathering that new methods for responding to national security are needed. “At the Department of Commerce, we are focused on national security more than ever. We are investing in our tools today to ensure we’re prepared for whatever challenges we may face in our future national security environment.” Export Controls One of the tools at Commerce’s disposal is the implementation of export controls to ensure that the US private sector’s technological innovation is not diverted to destructive ends that harm US national security while also still allowing for technological innovation to take place domestically. Another key priority is the development of defense partnerships. Mr. Graves pointed to the department’s sharp focus on weakening Russia’s war machine through aggressive export control measures and also business development campaigns to support commercial linkages with Ukraine. US supply chain resilience is a national security imperative for Commerce. The department will convene a diverse array of public and private sector leaders at a Supply Chain Data and Analytics Summit later this year, he said.

In its first material communication since imposing a "pause" on license issuance for firearms exports, Commerce's Bureau of Industry and Security  issued a collection of information addressing three activities: (1) Import Certificates/End Use Certificates, (2) Delivery Verification, and (3) Firearms Entry Clearance Requirements. This notice is not directed solely at the firearms industry.  Import certificate and end user statements are required in other EAR controlled transactions, not just firearms. And the delivery verification process can be used for any transaction under the EAR. It is only the third item that is specifically directed to the firearms trade. "We don’t see this has having a significant impact on our industry," notes Larry Keane of the National Shooting Sports Foundation.  

The First Quarter Technical Advisory Committees (TAC) meetings begin January 30 with Sensors and Instrumentation The schedule on the BIS website has not been updated and reflects last year's dates and times. Also The President's Export Council Subcommittee on Export Administration (PECSEA) and solicits nominations for membership. Nominations for members must be received on or before February 8,.

ASML, a Dutch semiconductor producer, had its license to ship two types of machines that make semiconductors partially revoked. This comes after ASML canceled some of its shipments ahead of tightening Dutch restrictions on exports. "China opposes the US’s overstretching the national security concept and using all sorts of pretexts to coerce other countries into joining its technological blockade against China," said Foreign Ministry Spokesperson Wang Wenbin.  

December 29, the Bureau of Industry & Security published a series of updates to the Frequently Asked Question (FAQs) associated with the October 7th, 2022 and October 17, 2023 Semiconductor Rules. The Interim Final Rules (IFRs) amend the Export Administration Regulations (EAR) to implement more effective export controls on semiconductor manufacturing equipment (SME), advanced computing items, and supercomputers, addressing national security concerns. 

In a wide ranging conversation at Georgetown University, Under Secretary of Commerce for Industry and Security Alan Estevez shared his perspective on the evolution of export controls and the road ahead. "I believe now that we are at sort of a foundational inflection point as to the role and purpose of export controls," Estevez said. " Commerce is in the middle of national security in a number of spheres these days.

"We do it from two perspectives. We do it from offense and we do it from defense. Offense is things like Chips Act. So how are we going to build chip production in the United States, where we have assured supply? Semiconductors are the foundation of a lot of what goes on in our economy. "The core of the defense structure is our export controls. Protecting the technology that our adversaries could use against us, should it ever come to any kind of kinetic action...

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