BIS to Begin Publicizing Charging Letters Before Resolutions, Adds to Entity List

The change to its administrative enforcement policies, previewed by BIS’s top export enforcement official Matthew Axelrod last month (see 2205160062), is meant to bolster the agency’s “transparency efforts,” BIS said in a final rule effective June 2. “When we bring administrative charges for violations of the export rules, we want everyone to know it,” Axelrod said. “By making enforcement actions public when charged, we aim both to educate the exporting community about the consequences that can result from misconduct and to incentivize investment in compliance and deterrence.”

As of June 2, all BIS charging letters filed with an administrative law judge can be made public “prior to the final administrative disposition of the case,” the agency said. “Previously, interested parties had less timely information regarding BIS’s enforcement activities, limiting their ability to use such information in the development of, for example, their compliance programs,” BIS said.

The new policy will help BIS “inform interested parties of ongoing enforcement efforts in a more timely way” and “educate the exporting community” about new revisions to Export Administration Regulations that “could result in new bases for enforcement action.”

A former BIS agent said the threat of a charging letter being made immediately public could sway more companies into voluntarily disclosing potential violations, which usually result only in a warning letter (see 2205230018). The agency said other documents filed in enforcement cases, such as pre-charging letters, will continue to be made public only after the case is resolved.

In another change, BIS extended a license requirement for Russian and Belarusian military end-uses and end-users to cover certain shipments of food and medicine designated as EAR99. Those shipments will be assessed case by case, which will give BIS more “flexibility” to deny food and medical exports that may “significantly contribute to the sustainment and reconstitution” of the Russian military fighting in Ukraine.

The agency stressed the license requirement doesn’t extend to exports of EAR99 food and medicine for the Russian people, the people of Crimea or the so-called Donetsk People's Republic and Luhansk People's Republic regions of Ukraine. It also doesn’t “alter or otherwise affect” the agency’s policy toward exports of EAR99 food and medicine to other parts of Ukraine.

Other changes clarify BIS’s export restrictions on luxury goods to Russia and Belarus, and the agency’s license review policy for exports that support civil telecommunications infrastructure, and make several technical corrections to the EAR. The clarifications “will help to ensure that the exporting community better understands and can more effectively comply with the new rules,” BIS Undersecretary Alan Estevez said.

All exports, reexports and transfers that now require a license due to this rule that were aboard a carrier to a port as of June 2 may proceed to their destinations under the previous eligibility, BIS said.

The agency also added 71 entities to its Entity List for supporting Russia’s military or for trying to illegally acquire U.S.-origin goods -- 70 entities based in Russia and one in Belarus. They include nuclear facilities, research entities, aircraft manufacturers and engineering plants.

Sixty-six of the entities are subject to BIS’s Russia/Belarus foreign direct product rule and are designated as military end-users. All the entities will require a license for all items subject to the EAR. No license exceptions will be available, and BIS will review applications under a policy of denial. The additions took effect June 2.

BIS said the controls will help restrict the entities’ access to items subject to the EAR that allow Russia “to project power and fulfill its strategic ambitions.” The 66 entities subject to the FDP rule have tried to buy U.S.-origin items to support Russia’s military, BIS said. “Today’s action demonstrates that we’re watching closely and will not hesitate to act when there is evidence that entities and individuals are providing support to Russia’s military,” Estevez said.

All exports, reexports and transfers that now require a license due to this rule that were aboard a carrier to a port as of June 2 may proceed to their destinations under the previous eligibility, BIS said.

The new entities are:

Belarus

• Joint Stock Company Eleron

Russia

• 5th Shipyard
• 46th TSNII Central Scientific Research Institute
• Alagir Resistor Factory
• A.A. Kharkevich Institute for Information Transmission Problems (IITP), Russian Academy of Sciences (RAS)
• Ak Bars Holding
• AO Rubin
• Branch of AO Company Sukhoi Yuri Gagarin Komsomolsk on Amur Aircraft Plant
• Branch of PAO Il - Aviastar
• Branch of RSK MiG Nizhny Novgorod Aircraft Construction Plant Sokol
• Chkalov Novosibirsk Aviation Plant
• Concern Radio-Electronic Technologies, Joint Stock Company Aeropribor Voskhod
• Concern Radio-Electronic Technologies, Joint Stock Company All Russian Scientific Research Institute Gradient
• Concern Radio-Electronic Technologies, Joint Stock Company Almatyevsk Radiopribor Plant
• Concern Radio-Electronic Technologies, Joint Stock Company Experimental Design Bureau Elektroavtomatika in the name of P.A. Efimov
• Concern Radio-Electronic Technologies, Joint Stock Company Industrial ControlsDesign Bureau
• Concern Radio-Electronic Technologies, Joint Stock Company Kazan Instrument Engineering and Design Bureau
• Concern Radio-Electronic Technologies, Joint Stock Company Microtechnology
• Concern Radio-Electronic Technologies, Joint Stock Company Phasotron Scientific Research Institute of Radio Engineering
• Concern Radio-Electronic Technologies, Joint Stock Company Radiopribor
• Concern Radio-Electronic Technologies, Joint Stock Company Ramensk Instrument Engineering Bureau
• Concern Radio-Electronic Technologies, Joint Stock Company Research and Production Center SAPSAN
• Concern Radio-Electronic Technologies, Joint Stock Company Rychag
• Concern Radio-Electronic Technologies, Joint Stock Company Scientific Production Enterprise Izmeritel
• Concern Radio-Electronic Technologies, Joint Stock Company Scientific Production Union for Radioelectronics named after V.I. Shimko
• Concern Radio-Electronic Technologies, Joint Stock Company Taganrog Communications Scientific Research Institute
• Concern Radio-Electronic Technologies, Joint Stock Company Urals Instrument Engineering Plant
• Concern Radio-Electronic Technologies, Joint Stock Company Vzlet EngineeringTesting Support
• Concern Radio-Electronic Technologies, Joint Stock Company Zhiguli Radio Plant
• Concern Radio-Electronic Technologies, Public Joint Stock Company Bryansk Special Design Bureau
• Concern Radio-Electronic Technologies, Public Joint Stock Company Moscow Institute of Electro Mechanics and Automation
• Concern Radio-Electronic Technologies, Public Joint Stock Company Stavropol Radio Plant Signal
• Concern Radio-Electronic Technologies, Public Joint Stock Company Techpribor
• Concern Radio-Electronic Technologies, Ramensky Instrument Engineering Plant
• Concern Radio-Electronic Technologies, V.V. Tarasov Avia Avtomatika
• Design Bureau of Chemical Machine Building KBKhM
• Far Eastern Shipbuilding and Ship Repair Center
• Gazprom Neft Shelf
• Ilyushin Aviation Complex Branch: Myasishcheva Experimental Mechanical Engineering Plant
• Institute of Marine Technology Problems Far East Branch Russian Academy of Sciences
• Irkutsk Aviation Plant
• Joint Stock Company Aerocomposit
• Joint Stock Company Avtomatika
• Joint Stock Company Bryansk Electromechanical Plant
• Joint Stock Company Eleron
• Joint Stock Company Experimental Design Bureau named after A.S. Yakovlev
• Joint Stock Company Federal Research and Production Center Altai
• Joint Stock Company Head Special Design Bureau Prozhektor
• Joint Stock Company Ilyushin Aviation Complex
• Joint Stock Company Lazurit Central Design Bureau
• Joint Stock Company Ramensky Instrument Engineering Plant
• Joint Stock Company Research and Development Enterprise Protek
• Joint Stock Company SPMDB Malachite
• Joint Stock Company Votkinsky Zavod
• Kalyazinsky Machine Building Factory – Branch of RSK MiG
• Main Directorate of Deep-Sea Research
• NPP Start
• OAO Radiofizika
• P.A. Voronin Lukhovitsk Aviation Plant, branch of RSK MiG
• Public Joint Stock Company Voronezh Joint Stock Aircraft Company
• Radio Technical Institute named after A. L. Mints
• Russian Federal Nuclear Center – All Russian Research Institute of Experimental Physics
• Shvabe JSC
• Special Research Bureau for Automation of Marine Researches Far East Branch Russian Academy of Sciences
• Special Technological Center LLC
• St. Petersburg Marine Bureau of Machine Building Malakhit
• St. Petersburg Naval Design Bureau Almaz
• St. Petersburg Shipbuilding Institution Krylov 45
• Strategic Control Posts Corporation
• Systems of Biological Synthesis LLC.
• TsKB MT Rubin
• Vladimir Design Bureau for Radio Communications OJSC
• V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences
• Voentelecom JSC.