20/9/2023 Expand your Horizons
EU - Dual-use items - Update of the control list
On 15 September 2023, the European Commission adopted a Delegated Regulation updating the EU dual-use export control list in Annex I to Regulation (EU) 2021/821.
The update brings the list in line with decisions taken in the multilateral Export Control Regime's Wassenaar Arrangement (WA), Missile Technology Control Regime (MTCR), and Nuclear Supplier Group (NSG) in 2022. The decisions taken in the Australia Group (AG) in 2022 have been introduced in the control list in Annex I by means of the Commission Delegated Regulation (EU) 2023/996 of 23 February 2023.
This update mainly pertains to the control parameters of manufacturing equipment (NSG), of high-performance computers and of lasers (WA), the addition of propulsion motors for submersible vehicles, and of technology for the development of gas turbine engines for aircraft (WA), as well as the adjustment of technical definitions, notes and descriptions, and editorial changes.
Subject to the Council and the European Parliament raising no objections within a period of two months, the Commission Delegated Regulation (Ref. C(2023)6125) will be published and will enter into force on the day following that of its publication.
15 Sep 2023. Source.
See also: 'Comprehensive Change Note Summary – update 2023'. It provides a detailed overview of all changes compared to the 2022 Exceptional Update of the EU Dual-Use Control List across all 10 categories.
US - Congress report suggests creation of a new export control regime
Policymakers and experts agree that the United States should introduce a new export control regime that coordinates policy with smaller groups of like-minded nations. ‘Because of difficulties in reaching consensus among the memberships of existing export control arrangements, several policymakers and experts have advocated that the United States coordinate export control policy with smaller groups of likeminded states to achieve specific national security, foreign policy, and economic goals,’ said the report, published 8 September.
The idea is to create a “fifth” regime, fashioned after CoCom, the Coordinating Committee for Multilateral Export Controls, an informal agreement between the United States and most of its NATO allies, together with Australia and Japan.
A new, fifth mechanism would be in addition to the four existing export control regimes: the Zangger Committee and Nuclear Suppliers Group control nuclear material and related technology; the Missile Technology Control Regime (‘MTCR’) relates to missiles and associated technology; the Australia Group controls biological and chemical weapons and rela
ted materials; and the Wassenaar Arrangement watches over conventional arms and dual-use goods.
The report also stated that ‘the existing multilateral system is generally either too slow, too compromised, or too limited in terms of its nonproliferation-focused mandate. A new regime, these experts and officials argue, would provide space to coordinate on issues outside of the limited nonproliferation concerns the existing regimes address, including human rights abuses, and strategic economic competition.’
8 Sep 2023. Source.
United Arab Emirates - New Guidance on Terrorist and Proliferation Financing Red Flags
The publication is providing a consolidated list of Terrorist Financing (TF) and Proliferation Financing (PF) red flags that aim to assist financial institutions (FIs), designated non-financial businesses & professions (DNFBPs), and virtual asset service providers (VASPs) in identifying and detecting suspicious TF and PF activities
Some of the red flags specific to terrorist financing cases related to the UAE and other regional countries listed in the guidance include:
Carrying out of multiple ATM cash withdrawals in short succession (potentially below the daily cash reporting threshold) across various locations in territories where sanctioned people have influence or in the border of sanctioned countries.
Transactions involving certain high-risk jurisdictions such as locations in the midst of or in proximity to, armed conflict where terrorist groups operate or locations, which are subject to weaker ML/TF controls.
The use of virtual assets to send funds to a few select wallets at unregulated virtual assets exchanges (or exchanges in territories where sanctioned people have influence or sanctioned jurisdictions).
Dealings, directly or through a client of your client, with sanctioned countries6 or territories where sanctioned persons are known to operate.
The use of shell companies through which funds can be moved locally and internationally by misappropriating the commercial sector in the UAE.
Earlier this month, senior officials from the United States, United Kingdom and the European Union were in the UAE to discuss export controls and the trade of potential dual-use products, according to official reports.
The United States has led a global push to ensure that sanctions on Russia are not circumvented, with envoys jointly travelling to countries to emphasise that the West’s sanctions on Moscow must be enforced.
The UAE is among countries considered to be ‘circumvention hubs,’ with reports of wealthy Russians using loopholes in the country to evade the US and European sanctions.
‘The visit was an opportunity to highlight the UAE’s export control framework, as well as outline in detail the clear and robust processes in place,’ he added. ‘The UAE has a legal export control framework and is continuously monitoring the export of dual-use products. We reiterated our commitment to remain in close dialogue with our international partners.’
Sep 2023. Source.
US - Illicit sale and transport of Iranian oil
The Justice Department announced the successful disruption of a multimillion-dollar shipment of crude oil by the Islamic Revolutionary Guard Corps (IRGC), that was bound for another country. The seizure was for over 980,000 barrels of contraband crude oil.
Suez Rajan Limited pleaded guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA). On that same date, the company was sentenced to three years of corporate probation and a fine of almost $2.5 million. In addition,
Empire Navigation, the operating company of the vessel carrying the contraband cargo, agreed to cooperate and transport the Iranian oil to the United States, and incurred the significant expenses hereby associated.
The complaint alleges a scheme involving multiple entities affiliated with Iran’s IRGC and the IRGC-Qods Force (IRGC-QF) to covertly sell and transport Iranian oil to a customer abroad. Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, false automatic identification system reporting, falsified documents and other means. The complaint further alleges that the charterer of the vessel used the U.S. financial system to facilitate the transportation of Iranian oil.
8 sep 2023. Source
Read for you - Our readings of the week
Switzerland. The Swiss Federal Department of Economic Affairs (‘EAER’) has published a document for individuals and businesses to help better understand sanctions in connection with Ukraine. 15 Sep 2023. Source
UK. The Department for International Trade issued a guidance notice in the frame of regulations banning the import of Russian iron and steel products processed in a third country which will take effect on 30 September, There will be no exceptions or transitional period for any goods covered by the measure. Traders should be prepared to have documentation available to demonstrate evidence of a good’s supply chain. An example of evidence may include a Mill Test Certificate (MTC), 8 Sep 2023. Source.
Finland. It would be "extremely risky" for Finland's Patria to sell its armoured vehicles or license their production to Ukraine without government help, its CEO said, urging Helsinki and other European nations to do more to facilitate deals with Kyiv.
"We should bear in mind that conducting an audit, which at least for us is a very versatile and profound process, in a country that is in war is almost impossible," he said in an interview. He listed the industry's complex supply chains, arms export permits, and difficulties in securing funding and insurance for a war zone as some of the challenges facing direct sales and licensed production, in addition to the risk of missile strikes. These risks would beterribly big for any company to bear on its own. 13 Sep 2023. Source.
US. Sergey Karpushkin, a resident of the United States and a citizen of Belarus, pleaded guilty to engaging in a scheme to violate U.S. sanctions and commit money laundering by conducting transactions for the purchase and acquisition of metal products valued at over $139 million from companies owned by Sergey Kurchenko, a sanctioned oligarch. He entered into contracts and purchase orders for pig iron, steel billets, and wire rods from these companies, received tens of thousands of tons of metal products from the companies, and agreed to share profits from these unlawful transactions. The sentence will now be determined by a federal district court judge. 13 Sep 2023. Source.