Iran Export Controls

China is likely to increase its use of economic and trade restrictions, specifically export controls, to penalize U.S. and EU companies that act against its interests, two security and economics experts said. While China hasn’t “extensively” used its newly established export control or sanctions regimes, its recently issued export control white paper and other rhetoric suggest it won't hesitate to soon use those powers more broadly, the experts said.

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The Office of Foreign Assets Control published a new fact sheet, three new general licenses and other guidance to help humanitarian aid flow more easily to Afghanistan. The six-page guidance describes the various general licenses available for transactions involving Afghanistan, which now cover certain U.S. government activities, transactions involving international organizations and other humanitarian work. The guidance comes after months of banks and non-governmental organizations asking OFAC to provide more assurances that they won’t be caught by sanctions (see 2109020064).

The Bureau of Industry and Security added 37 entities to the Entity List, including 34 Chinese research institutes and technology companies, for supporting China’s military modernization efforts or Iran’s weapons program. Other entities added to the list, located in Georgia, Malaysia and Turkey, supplied U.S.-origin items to Iranian defense industries, BIS said.

The Office of Foreign Assets Control fined an unnamed person about $133,000 after they violated U.S. sanctions against Iran, OFAC said in a Dec. 8 notice. OFAC said the person accepted payment on behalf of an Iran-based company selling cement clinker to another company for a project in a third country.

The Bureau of Industry and Security added 27 entities to the Entity List for illegally selling technology to China, North Korea and other sanctioned countries, for supporting China’s military modernization efforts or for contributing to Pakistan’s nuclear and missile programs, the agency said Nov. 24. The Entity List additions include a range of laboratories and companies operating in the semiconductor, microelectronics and machinery sectors in China, Japan, Pakistan and Singapore, including several major Chinese chip companies.

A recent sanctions enforcement case highlighted the various export compliance hurdles associated with sales through overseas distributors, which is becoming one of the “greatest areas of export compliance risk,” Williams Mullen said in an Oct. 13 alert. In the case, the Office of Foreign Assets Control said Texas-based NewTek sold products to third-country distributors despite having knowledge those products were intended for an Iran-based reseller (see 2109100007), which ultimately led to sanctions violations.

Industry should expect a “surge” in corporate enforcement from the Department of Justice now that officials have had time to transition from the previous administration, particularly in sanctions and export control areas, Crowell & Moring said Oct. 12. The firm expects a “heavy focus” on trade violations involving Iran, China, North Korea and Russia, and continued focus on cryptocurrencies, including enforcement that targets illegal ransomware activities and payments (see 2110130038). The firm also noted that the U.S. has devoted more resources to foreign bribery enforcement, including recently assigning a squad of FBI agents to work full time in the DOJ’s Fraud Section, which will help the agency’s investigative efforts.

A former professor at the Norwegian University of Science and Technology has been charged in Norway with violating sanctions on Iran, export control regulations and the country's data breach laws, the Norwegian Broadcasting Corp. reported, according to an unofficial translation. The professor allegedly invited four guest researchers from Iran, giving them laboratory access at the university in 2018-19. The four also were given access to defense information without obtaining the necessary license from the Norwegian Ministry of Foreign Affairs, the report said. Norway alleges the visitors could have gained knowledge beneficial to Iran's nuclear program.

The Office of Foreign Assets Control fined two Texas companies -- both subsidiaries of Netherlands-based oilfield services company ​Schlumberger Ltd. -- for violating U.S. sanctions against Russia and Sudan, OFAC said Sept. 27. The agency fined oil and gas service provider Cameron International Corp. more than $1.4 million for illegally providing services for a Russian Arctic offshore oil project and fined gas product provider Schlumberger Rod Lift, Inc. $160,000 for helping to illegally facilitate shipments to Sudan. OFAC said neither company voluntarily self-disclosed its violations.