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Peter Jeydel's practice focuses on US export controls and economic sanctions, including the Commerce Department’s Export Administration Regulations (EAR), the State Department’s International Traffic in Arms Regulations (ITAR), and sanctions regulations administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the State Department. His practice spans all aspects of these regimes, including counseling, compliance, transactional advice, licensing and opinions, disclosures, and enforcement actions. He has also represented companies and individuals seeking de-listing from OFAC’s sanctions list. In addition, Pete has assisted clients in anti-corruption matters, including under the US Foreign Corrupt Practices Act (FCPA), and has experience handling reviews and investigations by the Committee on Foreign Investment in the United States (CFIUS).

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On October 7, 2022, in a move that was hailed by senior U.S. government officials as a paradigm shift in U.S. export controls policy toward China, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule that amends the Export Administration Regulations (EAR) to impose new and expanded controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items. Transactions for supercomputer end-uses and transactions involving certain entities on the Entity List are now subject to additional export controls, as are certain semiconductor manufacturing items and transactions for certain IC end uses. U.S. person activities as they relate to certain semiconductor activities in China are also now restricted.

Certain aspects of the rule, specified below, including the availability of license exceptions, became effective immediately on October 7, 2022. The new restrictions on U.S. person activities under § 744.6 became effective on October 12, 2022. The remainder of the provisions with a delayed effective date are specified below and will become effective on October 21, 2022. BIS is also accepting public comments on the interim final rule through December 12, 2022.

Separately, also on October 7, 2022, BIS issued a final rule, which revised the Unverified List (UVL) and clarified the activities and criteria that may lead to the addition of an entity to the Entity List. BIS stated that a sustained lack of cooperation by the host government in a country where an end-use check is to be conducted, such as China, that effectively prevents BIS from determining compliance with the EAR, will be grounds for adding an entity to the Entity List.

The U.S. policy goals behind the new rules are ambitious and seek to degrade China’s advanced computing capabilities in an unprecedented manner. As summarized recently by National Security Advisor Jake Sullivan: “On export controls, we have to revisit the longstanding premise of maintaining ‘relative’ advantages over competitors in certain key technologies.  We previously maintained a ‘sliding scale’ approach that said we need to stay only a couple of generations ahead. That is not the strategic environment we are in today. Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.”

The broad implications of these new rules, along with their efficacy from a policy standpoint, may take some time to come fully in to focus. For now, it is clear that any U.S. or non-U.S. individuals or entities that play any role in the global semiconductor supply chain—whether as manufacturers, producers, consumers, or otherwise—need to carefully review the new rules to determine what is required to comply and, if necessary, seek guidance or a license from BIS.

Continue Reading BIS Issues Expansive New Rules Targeting China

In a new rule that took effect on September 15, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) expanded and clarified the scope of the Export Administration Regulations (EAR) in a number of ways, some of which impose significant new compliance challenges related to Russia and Belarus.  To stay up with the latest developments, readers are encouraged to monitor and review new guidance in the form of Frequently Asked Questions (FAQs) published by BIS at https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus.

Continue Reading US Implements Subtle but Significant Expansions of Export Controls on Russia, Belarus, and Other Countries

On July 19, 2022, the State Department’s Directorate of Defense Trade Controls (DDTC) published Open General License (OGL) No. 1 and OGL No. 2, which authorize reexports to or retransfers within the U.K., Canada, and Australia of certain types of defense articles, services and technical data controlled under the International Traffic in Arms Regulations (ITAR).  In good news for industry, these groundbreaking ITAR provisions are relatively simple and easy to use. Both OGLs are valid for one year, effective August 1, 2022, through July 31, 2023.

Continue Reading New ITAR Rules Facilitate Defense Trade with the U.K., Canada and Australia

Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia.  Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports.  Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.

Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).

Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.

Continue Reading April 18 – May 2, 2022 Russian Sanctions Update

As of March 20, 2022, a new Executive Order (EO) prohibited certain imports, exports, the transfer of US dollar banknotes to Russia, and new investments involving certain sectors of the Russian economy.  The US Office of Foreign Assets Control (OFAC) also issued new General Licenses and Frequently Asked Question (FAQ) guidance. Additionally, the US Department of Commerce’s Bureau of Industry & Security (BIS) announced new regulations to control the export, reexport, and transfer (in country) of certain luxury goods to or within Russia and Belarus. BIS also identified numerous aircraft subject to US export controls jurisdiction that had flown to Russia without a license, and issued a reminder regarding the restrictions under General Prohibition 10 under the Export Administration Regulations (EAR) of servicing such aircraft.

Key points of these US sanctions developments and export controls are summarized below.

For a summary of US sanctions and export controls adopted between February 21 and March 8, 2022, see this Steptoe blog post.

Continue Reading Update: New US Sanctions on Russia Target Certain Imports, Exports, Dollar Banknotes, and Investments

Since February 21, 2022, the United States has joined a coalition of countries imposing sanctions in response to Russia’s invasion of Ukraine. New US sanctions and export controls are wide ranging and complex, significantly impacting trade and related financial transactions between the US and Russia, as well as Belarus.  They also affect transactions and exports from outside the United States in many areas of commerce. The following is a high-level overview of recent US legal developments as of March 8, 2022.

For more information on how these measures could impact your organization, contact a member of Steptoe’s Economic Sanctions and Export Controls teams.

Additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.

Continue Reading A Summary of New Ukraine-related US Sanctions and Export Controls on Russia and Belarus

On December 9, 2021, the US government announced an arms embargo on Cambodia, driven by a litany of issues, including concerns about the country’s military cooperation with China and human rights abuses.  The arms embargo is implemented through the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR), under amendments made by the Department of State’s Directorate of Defense Trade Controls (DDTC) and the Department of Commerce’s Bureau of Industry and Security (BIS), respectively.

The State Department final rule adds Cambodia to Section 126.1 of the ITAR, which imposes a unilateral US arms embargo. The BIS final rule similarly adds Cambodia to EAR Country Group D:5 (US arms-embargoed countries).  The BIS rule also imposes a more restrictive review policy for license applications for dual-use items controlled for national security reasons and subjects Cambodia to the EAR’s broad military and military-intelligence end-use and end-user restrictions.

Continue Reading US Imposes Arms Embargo on Cambodia Over China Concerns

On December 2, 2021, the United States, the EU, the UK, and Canada announced a new round of coordinated sanctions in response to their concerns regarding the Belarusian government’s continued undermining of democracy, its violations of human rights, and its alleged orchestration of irregular migration into the EU. The latest sanctions include blocking sanctions and asset freezes, as well as new restrictions on US persons dealing in Belarusian sovereign debt.

For more information on earlier US, UK, and Canadian sanctions related to Belarus, see our August 13, 2021, blog post and April 19, 2021, blog post.

Continue Reading Coordinated Sanctions Further Align Transatlantic Policies on Belarus

On November 15, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Public Ministry of Nicaragua and nine Nicaraguan government officials as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 13851 and the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA). According to a Treasury Department press release, the designations respond to the Nicaraguan government’s repression of opposition politicians leading up to “sham” elections in November 2021.

Among the designated persons is a senior banking regulatory official in Nicaragua, which underscores the risk to financial institutions in particular seeking to navigate US sanctions risks while operating in Nicaragua.

Continue Reading OFAC Designates Nicaraguan Officials after “Sham Elections”

They have been almost a decade in the making, but have finally arrived: new U.S. export controls on “cybersecurity items,” including products and technology involving “intrusion software” and IP network communications surveillance.  Published today but effective January 19, 2022, the interim final rule from the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) amends the Export Administration Regulations (“EAR”) to add these new cybersecurity export controls.  The interim final rule is highly technical and complex, but ultimately contains a mix of good news and bad for the cybersecurity community.  BIS states in its press announcement that the rule is only intended to restrict “malicious cyber activities,” but it nonetheless imposes compliance obligations and costs even when activities ultimately are not restricted.  At least in this sense, the rule will impact the entire cybersecurity sector.

Continue Reading Cybersecurity Community Beware: US Finally Enacts “Intrusion Software” Rule