U.S. Commerce Department Expands Export Restrictions on Russia

WASHINGTON – The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today is further restricting trade with Russia in response to Russia's continued actions supporting separatists in Ukraine.

BIS will institute a policy denying export, reexport or foreign transfer of certain items for use in Russia's energy sector that may be used for exploration or production from deepwater, Arctic offshore, or shale projects that have the potential to produce oil. While these sanctions do not target or interfere with the current supply of energy from Russia or prevent Russian companies from selling oil and gas to any country, they make it difficult for Russia to develop long-term, technically challenging future projects.

In addition to these energy sector restrictions, BIS will add another Russian defense technology company – OJSC United Shipbuilding Corporation – to the Entity List based on a determination it is involved, or poses a significant risk of becoming involved, in activities contrary to the national security and foreign policy interests of the United States. Designation on the Entity List imposes a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations to the designated entities, with a presumption of denial.

Today's actions are being taken in conjunction with an announcement by the U.S. Department of the Treasury that it also will impose sanctions on a number of parties.

BIS controls exports and reexports of commodities, technology, and software to support national security and foreign policy , including nuclear , chemical and biological weapons, and missile non-proliferation, human rights, regional stability, and curbing terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.

Commerce Department Announces Further Expansion of Export Restrictions on Russia 

WASHINGTON – As part of a series of sanctions announced today by the United States, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) is adding 11 parties to its Entity List in response to Russia's continued action in Ukraine. Russian support to the separatists has fueled increased fighting and casualties in eastern Ukraine. Russia continues to provide the separatists with heavy weapons, equipment, and other financing, and continues to allow militants to enter Ukraine freely. In addition, Russia has returned many of its troops to border areas, and also has been massing additional equipment near the border for potential transfer into Ukraine.

In response to Russia’s continued policy of destabilization in eastern Ukraine and ongoing occupation of Crimea and Sevastopol, the following 11 parties are being added to the Entity List based on a determination they are involved, or pose a significant risk of becoming involved, in activities contrary to the national security and foreign policy interests of the United States. Designation on the Entity List imposes a license requirement for the export, re-export or foreign transfer of items subject to the Export Administration Regulations to the designated Entities, with a presumption of denial.

Today's additions to the Entity List are: 1) Donetsk People’s Republic; 2) Feodosia Enterprise; 3) JSC Concern Radio-Electronic Technologies; 4) JSC Concern Sozvezdie; 5) JSCC Almaz-Antey; 6) Kalashnikov Concern; 7) KBP Instrument Design Bureau; 8) Luhansk People’s Republic; 9) MIC NOP Mashinostroyenia; 10) Research and Production Corporation “UralVagonZavod”; and 11) State Research and Production Enterprise “Bazalt.”

Today’s action is being taken in conjunction with an announcement by the Department of the Treasury that it also will impose sanctions on a number of parties.

BIS controls exports and reexports of commodities, technology, and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability, foreign policy and anti-terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.

U.S. Commerce Department Expands Export Restrictions Aimed at Russia’s Defense Sector

WASHINGTON– The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced additional steps that will further restrict trade with Russia in response to Russia's continued efforts to destabilize eastern Ukraine. Today's actions are being announced in conjunction with an announcement by the U.S. Department of the Treasury that it is also imposing a new set of targeted prohibitions and designations against a range of Russian entities.

BIS will add five entities operating in the Russian Federation’s defense sector to the BIS Entity List. Designation on the Entity List imposes a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations (EAR) to the designated entities, with a presumption of denial. BIS will also require licenses for an additional group of items destined to military end uses or end users in Russia.

The entities added to the BIS Entity List are:

• Almaz-Antey Air Defense Concern Main System Design Bureau, JS is one of the world’s largest defense industry complexes, specializing in development of anti-air, anti-missile and space defense systems.
• Tikhomirov Scientific Research Institute of Instrument Design specializes in the development of weaponry control systems for fighter planes and mobile medium range anti-aircraft surface to air missile (SAM) defense vehicles.
• Mytishchinski Mashinostroitelny Zavod, OAO manufactures and supplies ordnance and accessories, including naval, aircraft, anti-aircraft and field artillery products.
• Kalinin Machine Plant, JSC designs and manufactures machines for military and civil applications.
• Dolgoprudny Research Production Enterprise develops and manufactures high-technology defense products.

In addition, BIS also added five Russian energy companies to the Entity List to impose a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations (EAR) to those companies when the exporter, reexporter or transferor knows those items will be used directly or indirectly in exploration for, or production from, deepwater, Arctic offshore, or shale projects in Russia. License applications for such transactions will be reviewed with a presumption of denial when for use directly or indirectly for exploration or production from deepwater, Arctic offshore, or shale projects in Russia that have the potential to produce oil.

The Russian energy sector entities added to the BIS Entity List are:

• Gazprom, OAO major business lines are geological exploration, >production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel as well as generation and marketing of heat and electric power.
• Gazpromneft is a Russian oil company engaged primarily in oil & gas exploration and production, the sale and distribution of crude oil, and the production and sale of petroleum products.
• Lukoil, OAO is a leader of Russia’s petroleum industry.
• Rosneft a leader of Russia’s petroleum industry. Rosneft activities include hydrocarbon exploration and production, upstream offshore projects, hydrocarbon refining, and crude oil, gas and product marketing in Russia and abroad.
• Surgutneftegas is a Russian oil and gas company that was created in 1993 by merging several previously state-owned companies owning large oil and gas reserves in Western Siberia.

BIS controls exports and reexports of commodities, technology, and software to support national security and foreign policy, including nuclear, chemical and biological weapons, and missile non-proliferation, human rights, regional stability, and curbing terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit: www.bis.doc.gov.

Bureau of Industry and Security Fines California Company for Illegal Export of Technology to Russian Engineer

WASHINGTON – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), Office of Export Enforcement (OEE), today announced that it has reached a $115,000 civil settlement with Intevac, Inc., of Santa Clara, CA. BIS fined the company for five violations of the Export Administration Regulations (EAR), including the unauthorized release of export controlled manufacturing technology to a Russian national working at its U.S. facility. The settlement involves "deemed exports," releases of controlled technology made to a foreign national located in the U.S.

"Deemed export compliance is a top priority for the Bureau of Industry and Security," said David W. Mills, Assistant Secretary of Commerce for Export Enforcement. "Today’s settlement highlights the need for companies to be vigilant to prevent the unauthorized release of U.S. technology and data."

Intevac voluntarily disclosed the unauthorized release of drawings and blueprints for parts and identification numbers for parts to the Russian national in question, who was employed as an engineer at the company’s Santa Clara headquarters. Under the EAR, such information constitutes technology that is controlled for national security reasons. Intevac applied for a deemed export license after discovering the initial releases but failed to prevent additional releases of technology while the license application was pending. BIS charged Intevac with knowledge of these additional releases and considered the company’s conduct to be an aggravating factor in the penalty assessment. The company was also charged with one violation related to the unauthorized transmission of technology to its subsidiary in China.

Organizations that most commonly obtain deemed export licenses include universities, high technology research and development institutions and bio-chemical firms. In certain cases, they need to obtain deemed export licenses from BIS before making such releases.

BIS controls exports and reexports of dual-use commodities, technology, and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability, foreign policy and anti-terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.