Chip company ASML Netherlands may refuse job applicants who may not be able to comply with U.S. export regulations, an independent Netherlands human rights monitor ruled this month, saying the refusal doesn't violate Dutch anti-discrimination laws. The monitor said ASML is justified in not hiring applicants from certain countries to positions where they could access U.S.-controlled dual-use technologies, according to an unofficial translation of the judgment, otherwise ASML could face “major risks of sanctions” from the U.S.
Iran Export Controls
Certain items on the Commerce Control List require a license from BIS to export them to Iran. The Iranian Transactions Sanctions Regulations (ITSR) (31 CFR Part 560) also prohibit the export and reexport of goods to Iran subject to EAR.
A ramping up of U.S. export enforcement efforts is causing companies to revisit their compliance practices, particularly as the Bureau of Industry and Security conducts more outreach to exporters, said Alan Enslen, a trade lawyer with Womble Bond. He said companies are more frequently auditing their export compliance programs amid a number of signs that the Biden administration is increasing scrutiny on potential export violations, including a multi-agency memo issued in March that Enslen said was a “shot across the bow” for U.S. exporters.
Several companies this month disclosed potential export control or sanctions violations or updated the status of their current disclosures, including an information technology services company, an investment firm and a digital asset services company. The potential violations involve a business trying to exit the Russian market, a company potentially illegally sending export-controlled data and a firm waiting years for a response to two sanctions disclosures.
After settling with the Treasury Department for allegedly violating U.S. sanctions against Iran (see 2305180028), U.S. skin care company Murad is “committed to complying with U.S. economic sanctions laws,” a spokesperson said, adding that it has since “adopted appropriate sanctions and export control policies and procedures.” The company “extended our full cooperation to US authorities to resolve this matter."
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
The Bureau of Industry and Security announced a host of new Russia-related export controls, including measures that expand its Russian and Belarusian Industry Sector Sanctions, broaden its foreign direct product rule restrictions and add 71 new entities to the Entity List. Some of the changes, outlined in a 106-page final rule effective May 19, “better align” U.S. export controls with allies, place new export license requirements on additional “industrial items” and chemicals destined to Russia, and impose controls on certain electrical parts destined to Iran for use in unmanned drones. The Entity List changes, also effective May 19, add entities in Armenia, Kyrgyzstan and Russia for either supporting Russia’s military sector, diverting U.S.-controlled items to Russia or preventing a U.S. end-use check.
The Office of Foreign Assets Control reached a $3.3 million settlement this week with a California-based skincare company and a $175,000 settlement with its former unnamed senior executive for illegal exports to Iran in violation of U.S. sanctions. Murad, owned by multinational company Unilever, worked with distributors in Iran and the United Arab Emirates to ship goods to Iran, leading to at least 62 exports worth more than $11 million, OFAC said.
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).
The Commerce Department launched a paper this week detailing its strategy for a National Semiconductor Technology Center, a “key component” of the Chips Act designed to support and improve American leadership and competitiveness in semiconductor research, design, engineering and advanced manufacturing. The paper outlines how the NSTC will “accelerate America’s ability to develop the chips and technologies of the future,” the agency said, including by creating “affiliated technical centers around the country.”