The Commerce Department again renewed a temporary export denial order for Mahan Airways because the airline continues to violate the order and the Export Administration Regulations. Mahan Airways has been on the banned list since 2008, and Commerce in its Oct. 31 notice said the Iranian airline has continued flights between Iran and Iraq, Russia, China and Pakistan in violation of U.S. export controls. BIS also highlighted its "continued investigation" into Mahan’s recent acquisition of an Airbus A340 with Iranian tail number EP-MJA, which the agency said had flown between Tehran and Moscow as recently as Oct. 25.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
A recent ruling by a U.K. appellate court “sent the sanctions legal community into a bit of a tailspin” after it appeared to pave the way for the government to treat every Russian public and private entity as a sanctioned party, said Daniel Martin, a sanctions lawyer with HFW. Although the U.K. has since clarified that its sanctions aren’t necessarily meant to apply to every Russian company, Martin said questions remain, including whether banks now will be even less willing to handle Russia-related transactions, whether U.K. lawyers will continue to be able to participate in Russian-related proceedings, and whether similar logic could apply to U.K. sanctions against other countries.
CBP recently completed a review of export-related penalties and found they were “all legitimate” despite some shippers claiming they were unfairly imposed, said Peter Russell, a program manager with CBP’s outbound enforcement policy branch. Russell said CBP began the review after exporters, forwarders and others complained they were receiving years-old penalties for filing violations or unfair redelivery notices for used vehicle shipments.
Forwarders should think carefully before they file an export license application on behalf of a customer, a service that could make the forwarder liable in case of an export violation, said Tirrell McKnight, an official with the Bureau of Industry and Security's western regional office. McKnight suggested export application services should only be offered by forwarders who are confident in their export compliance, know their customers well and “want to take on that liability.”
A Commerce Department decision last week to suspend new export licenses for certain firearms, parts and ammunition caught the industry by surprise and has caused confusion about what types of shipments will be impacted. The announcement came after an uptick in license processing times in recent months, an industry lawyer said, and could lead to a surge in purchases of U.S. firearms by foreign customers that fear the suspension could be a harbinger of permanent change.
After years of asking for U.S. defense export control reform, Australia is hopeful that change is finally imminent, said Arthur Sinodinos, Australia’s former ambassador to the U.S. before leaving the role earlier this year. Sinodinos, who said he helped oversee the creation of the Australia-U.K.-U.S. (AUKUS) partnership, said he believes Congress will soon pass pending legislation to reduce technology sharing restrictions, and Australia is pushing for “as big an exemption as possible.”
The Defense Department is expecting to see a continued uptick in the value and number of foreign military sales (FMS) cases this year, part of a trend caused by increased global demand for weapons systems, said James Hursch, director of the agency’s Defense Security Cooperation Agency. He said the U.S. had "over $50 billion" in FMS sales last year, which was a “considerable increase over the previous year,” and that trend should continue.
The State and Commerce departments are frequently seeing illegal exports of controlled items, including technical data, by companies that aren’t classifying their products correctly and may not realize they need a license.
The Bureau of Industry and Security on Oct. 27 announced an immediate 90-day suspension of new export licenses for certain firearms, components and ammunition while it reviews its firearms policies to determine whether any permanent changes are “warranted.” During the next 90 days, the agency said it will not issue any new licenses for those exports to non-government end users worldwide, apart from Ukraine, Israel or a nation listed in Country Group A:1.
The U.S. should convince Japan, the Netherlands and other allies to restrict exports of lower-level chipmaking equipment to China to prevent Beijing from becoming the global leader in the "foundational" semiconductors those tools can produce, the Silverado Policy Accelerator think tank said in a new report last week. The report warned that current restrictions on advanced equipment risks pushing China to instead dominate the foundational chip sector, which will increase the likelihood that those semiconductors will be incorporated in U.S. defense technologies and could help Chinese companies “climb the value chain in leading-edge nodes, whether through legitimate or illegitimate means.”