After settling with the Treasury Department for allegedly violating U.S. sanctions against Iran (see 2305180028), U.S. skin care company Murad is “committed to complying with U.S. economic sanctions laws,” a spokesperson said, adding that it has since “adopted appropriate sanctions and export control policies and procedures.” The company “extended our full cooperation to US authorities to resolve this matter."
Iran Export Controls
Certain items on the Commerce Control List require a license from BIS to export them to Iran. The Iranian Transactions Sanctions Regulations (ITSR) (31 CFR Part 560) also prohibit the export and reexport of goods to Iran subject to EAR.
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
The Office of Foreign Assets Control reached a $3.3 million settlement this week with a California-based skincare company and a $175,000 settlement with its former unnamed senior executive for illegal exports to Iran in violation of U.S. sanctions. Murad, owned by multinational company Unilever, worked with distributors in Iran and the United Arab Emirates to ship goods to Iran, leading to at least 62 exports worth more than $11 million, OFAC said.
The Bureau of Industry and Security announced a host of new Russia-related export controls, including measures that expand its Russian and Belarusian Industry Sector Sanctions, broaden its foreign direct product rule restrictions and add 71 new entities to the Entity List. Some of the changes, outlined in a 106-page final rule effective May 19, “better align” U.S. export controls with allies, place new export license requirements on additional “industrial items” and chemicals destined to Russia, and impose controls on certain electrical parts destined to Iran for use in unmanned drones. The Entity List changes, also effective May 19, add entities in Armenia, Kyrgyzstan and Russia for either supporting Russia’s military sector, diverting U.S.-controlled items to Russia or preventing a U.S. end-use check.
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).
The Commerce Department launched a paper this week detailing its strategy for a National Semiconductor Technology Center, a “key component” of the Chips Act designed to support and improve American leadership and competitiveness in semiconductor research, design, engineering and advanced manufacturing. The paper outlines how the NSTC will “accelerate America’s ability to develop the chips and technologies of the future,” the agency said, including by creating “affiliated technical centers around the country.”
Two companies, one based in Taiwan and the other in Brunei, each must pay a fine of $83,769 and serve a five-year corporate probation term for conspiring to violate U.S. sanctions and export laws by shipping U.S.-made goods to Iran, DOJ announced. Taiwan-based DES International and Brunei-based Soltech Industry, charged in 2020 (see 2011120006), both pleaded guilty to conspiring to defraud the U.S. and violate the International Emergency Economic Powers Act and were sentenced in the U.S. District Court for the District of Columbia.
Microsoft will pay more than $3.3 million combined to settle alleged export control and sanctions violations largely related to its foreign subsidiaries, the Bureau of Industry and Security and the Office of Foreign Assets Control said in a pair of news releases April 6.
The State Department should impose “mandatory sanctions” against Iran under the Countering America’s Adversaries Through Sanctions Act in response to the country’s “significant defense transactions” with Russia, three Republicans said in a March 29 letter to Secretary of State Antony Blinken. Iran and Russia are building a “full-fledged defense partnership,” the letter said, which has led to “concerning advances in Iran’s military capabilities” and helped Russia sustain its war in Ukraine.