The Bureau of Industry and Security's new 50% rule only applies to ownership, not the “control” that a parent company may have over an affiliate, the agency said in new FAQs. Other FAQs stress that the government’s Consolidated Screening List is no longer exhaustive, clarify how license exceptions may apply to unlisted affiliates, explain how BIS will determine whether a U.S. exporter has “knowledge” that a listed entity owns part of a non-listed foreign affiliate, and more.
The Office of Foreign Assets Control this week renewed a general license that authorizes payments of certain taxes, fees, import duties, licenses, certifications and other similar transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation that would normally be blocked under Directive 4 of Executive Order 14024. General License 13O, which replaces 13N, authorizes those transactions through 12:01 a.m. ET Jan. 9., as long as they're “ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities.” The license was scheduled to expire Oct. 9.
A new interim final rule released by the Bureau of Industry and Security this week introduces a 50% ownership threshold rule for the Entity List and Military End-User List, a change that’s expected to drastically increase the number of companies subject to stringent export licensing restrictions. BIS also is adopting the rule, which it calls the “Affiliates rule,” for export transactions involving certain parties sanctioned by the Office of Foreign Assets Control, which BIS said will “align more closely” OFAC’s 50% rule with the new restrictions under the Export Administration Regulations.
The Bureau of Industry and Security has drafted and is preparing to soon publish an interim final rule that will introduce a 50% rule for parties on the Entity List and Military End-User List, according to a copy of the rule seen by Export Compliance Daily. The rule would impose the same export license requirements as the parent company for any affiliate owned 50% or more by an entity on those two lists, and it includes a 60-day temporary general license to authorize certain transactions with some non-listed entities before the new restrictions apply.
The Office of Foreign Assets Control this week sanctioned five people and one entity for helping North Korea's government generate revenue for its weapons and missile programs, including through weapons sales to the Myanmar military.
The Office of Foreign Assets Control this week sanctioned Indian nationals Sadiq Abbas Habib Sayyed and Khizar Mohammad Iqbal Shaikh for working with narcotics traffickers to supply "hundreds of thousands" of counterfeit prescription pills containing fentanyl and other illegal drugs to people in the U.S. OFAC also sanctioned Shaikh's company, KS International Traders, which the agency said is a "purported online pharmacy used in furtherance of Shaikh’s criminal activities." Both Shaikh and Sayyed were indicted on narcotics-related charges by DOJ last year.
The Office of Foreign Assets Control issued a final rule this week to officially change the heading of the Syria-Related Sanctions Regulations to the "Promoting Accountability for Assad and Regional Stabilization Sanctions Regulations." It also revises those regulations to reflect the administration's easing of certain Syria-related sanctions earlier this year (see 2507010012 and 2506300055). The changes take effect Sept. 25.
The State Department labeled Barrio 18, a Latin American rival gang to MS-13, as a Specially Designated Global Terrorist and Foreign Terrorist Organization, the agency said in notices released Sept. 23. The Office of Foreign Assets Control added Barrio 18 to its Specially Designated Nationals List to reflect the move.
The Office of Foreign Assets Control this week sanctioned the Lex Instituto de Estudos Juridicos LTDA, a holding company for Brazilian Supreme Federal Court Judge Alexandre de Moraes, who was sanctioned earlier this year for ordering "arbitrary" pretrial detentions and suppressing freedom of expression (see 2507300031). OFAC said Moraes used the company for ownership of his residence and other residential properties. The agency also sanctioned Moraes' wife, Viviane Barci de Moraes, who served as the head of the company. They were both designated under Global Magnitsky-related human rights authorities.
ShapeShift, a defunct Swiss cryptocurrency exchange that operated out of Colorado, will pay $750,000 to the Office of Foreign Assets Control to resolve allegations that it violated sanctions against Cuba, Iran, Sudan and Syria. OFAC said the exchange had no sanctions compliance program and illegally allowed users in those countries to use its platform for digital asset transactions.