The Month in International Trade – March 2024

Top Trade Developments

• BIS Updates Rules on Advanced Semiconductors
• BIS and DDTC Amendments Add Nicaragua to EAR Country Group D and ITAR § 126.1
• Commerce, Treasury, DOJ Publish Tri-Seal Sanctions and Export Control Compliance Note
• EU Acts to Ban Forced Labor Imports

Crowell Speaks

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Jana del-Cerro, Anand Sithian, or Simeon Yerokun or any member of the International Trade Group.

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Top Trade Developments

BIS Updates Rules on Advanced Semiconductors

The Department of Commerce’s (“DOC”) Bureau of Industry and Security (“BIS”) has published an interim final rule, as well as a request for comments, regarding new export controls for advanced computer, supercomputer, semiconductor, and manufacturing items. This update to the interim final rule serves to correct inadvertent errors and clarify export licensing procedures outlined in interim final rules “Export Controls on Semiconductor Manufacturing Items” (SME IFR) (88 FR 73424, October 25, 2023) and “Implementation of Additional Export Controls: Certain Advanced Computing Items; Supercomputer and Semiconductor End Use; Updates and Corrections” (AC/S IFR) (88 FR 73458, October 25, 2023). Corrections include revisions to license exceptions under the Export Administration Regulations (“EAR”) for products such as EUV masks, clarifications regarding semiconductor and semiconductor manufacturing item classification under the EAR, and further clarifications regarding end-user controls as they pertain to certain U.S. persons or Country Groups.

cRead the notice on the Federal Register website here.

For more information, contact: Jana del-Cerro, Chandler Leonard, Andrew Schlegel

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BIS and DDTC Amendments Add Nicaragua to EAR Country Group D and ITAR § 126.1

On March 15, 2024, the Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls (DDTC) amended the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) to implement new restrictions on trade with Nicaragua.

BIS’s amendments moved Nicaragua from Country Group B to Country Group D, applying a stringent licensing policy for items controlled for national security reasons, and making exports, reexports, and in-country retransfers to/within the country subject to ‘military end use’ and ‘military end user’ restrictions.

DDTC’s amendments added Nicaragua to ITAR § 126.1(p) and applies a policy of denial for licenses or other approvals for exports, imports, and brokering of defense articles or defense services.  This new policy of denial does not apply to non-lethal military equipment intended solely for humanitarian assistance, to include natural disaster relief.  Further, as a result of this amendment and in accordance with ITAR § 129.7, no broker may engage in or make a proposal to engage in brokering activities subject to the ITAR that involve Nicaragua without obtaining the approval of the DDTC.

For more information, contact: Jana del-Cerro, Dilan Wickrema

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Commerce, Treasury, DOJ Publish Tri-Seal Sanctions and Export Control Compliance Note

On March 6, 2024, the Department of Commerce, the Department of the Treasury, and the Department of Justice published a Tri-Seal Compliance Note titled “Obligations of foreign-based persons to comply with U.S. sanctions and export control laws” (the “Note”). The Note stresses that U.S. persons are not the only entities subject to U.S. sanctions and export controls, and that foreign individuals and companies face legal exposure should they engage with sanctioned persons/jurisdictions or deal with items subject to the Export Administration Regulations (EAR).  In addition to highlighting specific enforcement examples in which non-U.S. persons were held accountable for violations of U.S. sanctions and export control laws, the Note provides an overview of compliance considerations and measures for non-U.S. persons to help mitigate these risks.

Click here to continue reading the full version of this article.

For more information, contact: Nicole Succar, Kelsey Clinton, Chandler Leonard, Andrew Schlegel

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EU Acts to Ban Forced Labor Imports

The Council of the European Union and the European Parliament have reached a provisional deal on regulations banning forced labor in European Union supply chains. The legislative proposal supports the EU’s goals of prohibiting the use of forced labor in manufacturing, applying to both manufacturing within Europe and also to goods imported from abroad. This agreement marks a historic step in EU forced labor policymaking.

Click here to continue reading the full version of this article.

For more information, contact: John Brew, Pierfilippo Natta, Carolyn Krampitz, Andrew Schlegel

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Crowell Speaks

Banks Need Better Data to Catch Export Control Evasion, Industry Official Says
April 1, 2024 – Export Compliance Daily
Related Professionals: Jana del-Cerro, Dj Wolff

“Custom Broker Management” – ICPA Europe Conference - Dublin (April 24, 2024). Speaker: Vassilis Akritidis

“The Fourth Line of Defense: Whistleblowers and the New Cost of Non-Compliance” – 2024 Association of Certified Anti-Money Laundering Specialists (ACAMS) Assembly Hollywood Conference (April 8, 2024). Panelist: Anand Sithian

“Financial Crime Considerations: OFAC and FinCEN Latest Developments” – Prepaid Accounts Compliance (April 8, 2024). Speaker: Nicole Succar.

“Countering Sanctions and Export Controls Evasion in the Financial Services Industry” – Kharon and Crowell Webinar (April 4, 2024). Speakers: Jana del-Cerro, Dj Wolff

“Managing FTA’s” – ICPA Annual Conference San Diego (March 18, 2024). Speaker: John Brew

Association of Certified Sanctions Specialists (ACSS) OFAC Essentials Online Certificate Course 2024 (March 13, 2024). Speaker: Nicole Succar

President Biden Issues Executive Order on Sensitive Personal Data
March 1, 2024 – Foreign Investment Watch
Related Professionals: Caroline Brown