BIS Extends ZTE Temporary General License

On August 19, 2016 the Commerce Department Bureau of Industry and Security (BIS) is publishing in the Federal Register a notice extending its temporary general license for exports, reexports, and in country transfers to Zhongxing Telecommunications Equipment (ZTE) Corporation (ZTE Corporation) and ZTE Kangxun.  BIS is extending the period of the license from its current expiration date of August 30, 2016 to November 28, 2016.  BIS established the license in a notice published on March 24, 2016 (81 Fed. Reg. 15,633) after adding the two ZTE entities to its Entity List on March 8, 2016 (81 Fed. Reg. 12,004).  The temporary general license allows the use of the authority of No License Required (NLR) and license exceptions that were available for exports to the two entities prior to March 8th.  BIS has previously indicated that it will continue to renew the temporary general license if the U.S. government determines that ZTE Corporation and ZTE Kangxun continue to cooperate with the U.S. government in resolving the matter that resulted in their addition to the Entity List.  According to the March 8th notice, that issue involved a scheme developed by ZTE Corporation to reexport controlled items to Iran contrary to U.S. law.

Customer Due Diligence Guidance by FinCEN for Certain Financial Institutions

On July 19, 2016, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued Frequently Asked Questions to clarify the scope of its rule, “Customer Due Diligence (CDD) Requirements for Financial Institutions.”  Steptoe’s International Compliance Blog covered the rule in May. This rule took effect on July 11, 2016, but does not require implementation by covered financial institutions until May 11, 2018.  For more information, please click here.


FinCEN Expands its Real Estate GTOs, Citing Value of Initial Orders

Consistent with the trend we noted previously, FinCEN has expanded its real-estate focused Geographic Targeting Orders (GTOs).  The new GTOs target real estate transactions beyond Manhattan and Miami to include six geographic areas:  all boroughs of New York City, and counties in or near Miami FL, Los Angeles CA, San Francisco CA, San Diego CA, and San Antonio TX.  FinCEN’s initial real estate GTOs, issued in January 2016, covered only Manhattan and Miami. Continue Reading

New BIS Enforcement Guidance Yields Useful Insight, but Few Practical Changes

On June 22, 2016, the Department of Commerce, Bureau of Industry and Security (BIS), finalized a new enforcement policy for administrative (i.e., non-criminal) matters called the Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases (Guidance).  The Guidance, which is effective immediately, lays out the factors that BIS and its Office of Export Enforcement (OEE) will consider when evaluating whether to pursue enforcement actions, along with the appropriate penalties, for violations of the Export Administration Regulations (EAR).  It replaces the current version at Supplement No. 1 to Part 766 of the EAR.  The final Guidance makes some noteworthy changes as compared with the December 2015 proposed rule (2015 Proposed Rule).

While it does not appear likely that the Guidance will bring about any major changes in BIS enforcement practices, it does provide a clearer framework that may, with time, lead to more predictability in outcomes. For more information, please click here.

Team Telecom Deadlines?!

In June, the FCC issued a proposed rule to streamline the “Team Telecom” process. As we reported previously, this proposal has been in the works for a long time. Among the most significant developments—one rumored for a while but previously uncertain to appear in the proposed rule—is the concept that Team Telecom should have deadlines for its work.

This crazy concept of a deadline has indeed been incorporated. Under the proposed rule, Team Telecom would have to complete its process within 90 days, with an extension possible only for unusual circumstances. Continue Reading

European Commission Endorses EU-US “Privacy Shield”

Yesterday, the European Commission (EC) adopted its long-awaited decision endorsing the EU-US privacy shield. This is the latest milestone in restoring a stable legal basis for transatlantic flows of personal data, since the Court of Justice of the EU annulled the EU-US Safe Harbor program in its judgment in the Schrems case in October 2015. Continue Reading

The Cost of Non-Compliance in the International Regulatory Space Has Just Gone Up

Today, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a rule increasing penalties for violations of its economic sanctions regulations.  This type of penalty increase should now occur on an annual basis.

The maximum statutory penalty for each violation under most of OFAC’s sanctions programs, other than Cuba and a few others, is increasing from $250,000 to $284,582, or twice the value of the transaction, whichever is greater.  The $250,000 statutory maximum has been in place since 2007.

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EU Extends Russia Sanctions Through January 2017

The EU has extended, today, economic sanctions targeting specific sectors of the Russian economy to 31 January 2017.  The extension is set out in Council Decision (CFSP) 2016/1071.

The sanctions concern the financial, energy and defence sectors, as well as dual-use goods, and have been extended because the Council has assessed that the Minsk agreements concerning military activity in the Donetsk and Luhansk regions of Ukraine have not been respected.

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Massachusetts Company Hit with ITAR Penalty for a Single Individual Deemed Export Violation; Settlement Highlights Importance of Timely Disclosure

In its second enforcement action this year, on June 20th, the State Department’s Directorate of Defense Trade Controls (DDTC) reached a $100,000 settlement with Massachusetts-based Microwave Engineering Corporation.  Despite the small penalty amount, this case is noteworthy in several respects.  Continue Reading