The latest on Russia sanctions from the International Trade and Supply Chain Team
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BIS Adds 24 New Entities and Removes One from Entity List

On December 8, 2022, the Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a notice in the Federal Register adding 24 entities under 26 entries and removing one entity from the Entity List. The entities are from Latvia, Pakistan, Russia, Singapore, Switzerland, and the United Arab Emirates.  

Entities assisting Russia

The following entities were added to the Entity List because of their significant contributions to Russia’s military and defense industries:

  • Latvia
    • Fiber Optic Solutions
  • Russia
    • AO Kraftway Corporation PSC
    • AO PKK Milandr
    • AO Scientific Research Center for Electronic Computing
    • LLC Fibersense
    • Milandr EK OOO
    • Milandr ICC JSC
    • Milur IS, OOO
    • (OOO) Microelectronic Production Complex (MPK) Milandr
    • Ruselectronics JSC
    • Scientific Production Company Optolink
  • Switzerland
    • Milur SA

These entities also received a Footnote 3 designation because they are considered military end-users and as such, are also subject to the Russia/Belarus-Military End User Foreign Direct Product Rule found in 15 C.F.R. § 734.9(g). For a comprehensive explanation on the Russia/Belarus-Military End User Foreign Direct Product Rule, see our previous blog posts here, here, and here.

Entities assisting Iran

BIS also added Falcon Trading International Trading Company, Hawk Electronic Supply, Merlin Trading Company, and Pulse Tech International Company under the destination of Singapore for the companies’ roles in supplying or attempting to supply products to sanctioned Iranian company Pardazan System Namad Arman (PASNA).

Nuclear capabilities and non-proliferation considerations

Finally, BIS added several companies from Pakistan and the United Arab Emirates because of those entities’ contributions and roles in unsafeguarded nuclear actions and missile proliferation-related activities. Those entities include:

  • Pakistan
    • Dynamic Engineering Corporation
    • EnerQuip Private, Ltd.
    • NAR Technologies General Trading LLC
    • Rainbow Solutions
    • TROJANS
    • Universal Drilling Engineers
  • United Arab Emirates
    • EnerQuip Ltd. (UAE)
    • NAR Technologies General Trading LLC
    • TROJANS
    • Zan Enterprises FZE

Applicable Restrictions and License Review Policies

The above additions to the Entity List restrict access to all items subject to the EAR. As a result, the EAR will require licensing from BIS in order for any person to export, reexport or transfer (in-country) any item subject to the EAR in transactions involving these listed entities.  The license review policy is based on the rationale for the addition to the Entity List. Those entities added based on their support for Russia’s military and defense sectors will be reviewed based on a policy of denial for all items subject to the EAR except for food and medicine designated as EAR99, which will be reviewed on a case-by-case basis. For those entities added based on their transactions with Iran, the license review policy is a presumption of denial. Finally, those entities added based on their contributions and roles in unsafeguarded nuclear actions and missile proliferation-related activities will be reviewed based on the standards outlined in § 744.2(d) and in § 744.3(d) of the EAR, with the exception of licenses for transactions with Dynamic Engineering Corporation, which will only be reviewed according to the standards outlined in § 744.2(d).

BIS Extends Deadline for Comments to New Semiconductor Rules

On December 7, 2022, BIS issued a notice in the Federal Register stating that it is extending the deadline for public comment on the new semiconductor rules to January 31, 2022. BIS extended the deadline to allow more time for the public to review the interim final rule, issued on October 13, 2022, and to allow the public to consider BIS’s outreach efforts when preparing their comments.

Husch Blackwell’s Export Controls and Economic Sanctions Team continues to closely monitor all sanctions and export controls developments concerning Russia, Belarus, and Ukraine and will provide further updates as conditions change.  Interested readers can also review content covering previous Russia, Belarus and Ukraine sanctions developments at the Husch Blackwell Russia Sanctions Resource Library.  Should you have any questions or concerns, please contact Cortney Morgan, Grant Leach, Emily Mikes or Eric Dama of our Export Controls and Economic Sanctions Team.