Amended SDN Designations Under New Sanctions Programs

On May 23, the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”) published additional identifying information for persons whose property has been blocked for their activities related to the conflict in the Central African Republic.  See 79 Fed. Reg. 29,842 (May 23, 2014).  On May 12, President Obama issued an Executive Order that authorizes the blocking of all property in the United States of persons for activities including actions that threaten the peace or stability of the Central African Republic, actions or policies that undermine transitional institutions or democratic institutions, targeting women for acts of violence, the recruitment of child soldiers, and other human rights abuses.  See Exec. Order 13,667 (May 12, 2014).  The Executive Order provides authority for persons to be added to OFAC’s Specially Designated National (“SDN”) List.  Once a person is added to that list, that person’s property under U.S. jurisdiction is blocked, and U.S. persons are prohibited from transacting with that person.  The Central African Republic sanctions are the most recent example of sanctions programs targeting human rights violators, and a discussion of previous sanctions can be found in our Global Trade Blog.

Revisions to The Export Administration Regulations

As we have reported in our Global Trade Blog, Export Control Reform continues to reshape significantly U.S. export control regulations.  In addition to those broad measures, more incremental reform continues.  On May 27, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) amended the Export Administration Regulations (“EAR”) to reflect late 2013 changes to the multilateral Missile Technology Control Regime (“MTCR”).  See 79 Fed. Reg. 30021 (May 27, 2014).  The MTCR is one of four multilateral export control regimes in which the United States participates that affect the content of the EAR.

The changes include relatively minor revisions to eight ECCNs and two defined terms (“payload” and “repeatability”), and the addition of a new ECCN.  The new ECCN, 9A102, will control certain turboprop engine systems that are specially designed for items already controlled under the EAR, as well as their parts and components.

NASA Revisions to the FAR on Counterfeit Items

As we reported last month, DoD passed a final Rule in early May that requires companies to establish measures to identify counterfeit parts.  As predicted in the end of that article, NASA has followed suit by publishing a proposed Rule on June 10 that targets counterfeit part usage in NASA contracts.  Significantly, under the proposed Rule certain conditions lead to a requirement that contractors must report deficiencies to the Government-Industry Data Exchange Program (“GIDEP”).  Other shortcomings, such as identification of a counterfeit item, would require a report to the contracting officer.  The Contracting Officer can then inform “appropriate authorities” such as the Department of Justice.  Those authorities may in turn contact the supplier directly regarding the counterfeit goods.