*The title of this post has been corrected to clarify the BIS Undersecretary’s decision.

In an unusual decision, the Undersecretary for the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) remanded a civil penalty of $31,425,760 assessed by an Administrative Law Judge (“ALJ”) against Nordic Maritime Pte. Ltd., (“Nordic Maritime”) a Singapore-based marine seismic company and its chairman for violations of the Export Administration Regulations (“EAR”). While agreeing with the seriousness of the charges, the Undersecretary found that the statutory maximum penalty—double the value of the contract underlying the violations—was disproportionate in comparison to other BIS cases.  The Undersecretary’s decision is available here.

The decision offers a rare public view into the BIS enforcement process involving ALJs, which differs from other agencies such as the Office of Foreign Assets Control (“OFAC”), while demonstrating that the U.S. government continues to accept limits on reasonable penalties for violations of sanctions and export control regulations, notwithstanding the administration’s otherwise intense policy focus on Iran and other sanctioned territories.


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What can we learn from recent SDN designations by the US Office of Foreign Assets Control (OFAC) on multinationals such as subsidiaries of COSCO and Rosneft Trading S.A.?

OFAC has shown a willingness to impose, then lift, sanctions on major companies that play an

Click here to read the full Client Advisory by Steptoe.

On December 28, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Export Control Law (the draft law) for public comment. As China’s first export control statute, this law is intended to unify and significantly enhance China’s existing export control

On November 26, the US Department of Commerce (DOC) issued a proposed rule to implement Executive Order 13873 (Executive Order on Securing the Information and Communications Technology and Services Supply Chain) that could have far-reaching consequences for certain transactions involving information and communications technology and services (ICTS). The proposed rule covers a wide variety of transactions and would give DOC significant discretion to review, prohibit, or require mitigation for such transactions. The public comment period, initially set to close on December 27, has been extended to January 10, 2020, after which DOC will review submitted comments before taking further action.
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On December 26 the State Department will publish a long-awaited rule amending the International Traffic in Arms Regulations (ITAR) by providing a definition of activities that are not exports, reexports, retransfers, or temporary imports at 22 CFR section 120.54. Notably, this definition provides much-needed guidance on whether and under what circumstances end-to-end encrypted technical data is controlled under the ITAR. Published as an interim final rule, the State Department will accept comments through January 25, 2020, which could result in additional changes. However, the effective date of the interim final rule is set to be March 25, 2020, ninety days after publication in the Federal Register.


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The Council of the European Union recently adopted a Decision amending Council Common Position 2008/944/CFSP of December 8, 2008 defining common rules governing control of exports of military technology and equipment. The new Council Decision takes account of the developments at EU and international level since the adoption of the original 2008 Common Position. The Council Decision is accompanied by Conclusions and an updated version of the User’s Guide to Council Common Position 2008/944/CFSP defining common rules governing the control of exports of military technology and equipment.
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At a press conference on May 31, 2019, China’s Ministry of Commerce (MOFCOM) announced that China is going to establish an “unreliable entities list,” to which “foreign entities or individuals that do not obey market rules, deviate from the spirit of contracts, blockade or stop supplying Chinese companies for non-commercial reasons, and/or seriously damage the legitimate rights and interests of Chinese companies” will be added.[1]

MOFCOM’s announcement does not explicitly refer to the US Department of Commerce’s recent additions of Chinese entities to its Entity List, but the language it used at its press conference closely echoes the US Department of Commerce’s press statements for some of the Entity List designations. For example, regarding the background for establishing the “unreliable entities list,” MOFCOM has stated that some foreign entities who have stopped supplying Chinese companies have “endangered China’s national security and interests and threated the global industrial chain and supply chain security.”
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After months of escalating US economic sanctions on Venezuela and its international partners, the US Commerce Department’s Bureau of Industry and Security (BIS) is implementing major changes to US export controls on Venezuela that will significantly restrict remaining trade between the US (and third countries) and Venezuela in US export-controlled products (including technology transfers).  These regulatory changes will also impose licensing requirements in many cases for the employment of or other interactions with Venezuelan nationals in the United States and third countries that need access to export-controlled technology.

Effective May 24, 2019, BIS is amending the Export Administration Regulations (EAR) to make the following changes:

  • Remove Venezuela from Country Group B (countries eligible for favorable treatment for certain exports of national security-controlled items);
  • Add Venezuela to Country Group D:1 (countries of national security concern);
  • Add Venezuela to Country Group D:2 (countries of nuclear proliferation concern);
  • Add Venezuela to Country Group D:3 (countries of chemical and biological weapons proliferation concern); and
  • Add Venezuela to Country Group D:4 (countries of missile technology proliferation concern).


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On April 11, 2019, the US Commerce Department’s Bureau of Industry and Security (BIS) added 50 names to the Unverified List (UVL) (of which 37 are located in China and 6 in Hong Kong), while also removing 10 names.  The UVL list is found at Supplement No. 6 to Part 744 of the US Export Administration Regulations (EAR).  BIS said that it added these 50 names “on the basis that BIS could not verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the US Government’s control.”  By “bona fides,” BIS means that it could not confirm whether items previously exported to these parties were used the way the exporting party said they would be used, or was unable to confirm information about the actual end-user in those transactions.  In other words, the US Government is concerned about possible diversion of the exported products to unauthorized end-users or end-uses, because it cannot obtain enough information about the UVL parties or about the ultimate disposition of the items that were sent to them. 

BIS’s export control regulations, the EAR, may impose licensing requirements for any one of three reasons: 1) the item and destination country, 2) the end-user, and 3) the end-use.  The US Government periodically conducts end-use checks to confirm that items exported under BIS’s regulatory authority are being used as stated by the exporter of the item subject to the EAR.  These are typically in the form of either a pre-license check (PLC) occurring before the export takes place, or a post-shipment verification (PSV) occurring afterwards.  If BIS is unable to confirm whether items that were certified upon export as being destined to a particular party for a particular application are in fact to be used by that party for the stated application, BIS may add one or more of the parties who received the export to the UVL and impose restrictions on future exports to the party(ies).
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