U.S. Issues New Controls and Sanctions on Foreign Exports

At a glance

• The main takeaway: The Department of Commerce issued new export controls policies to sanction Russia-related exports and involved entities around the world.
• Impact on your business: U.S. businesses may face limitations and penalties on exporting certain goods, technologies, or services to certain countries and entities as a result of the new sanctions.
• Next steps: Meet with a specialist from Aprio’s Tariff and Customs team to review your export transactions against the new policies and establish compliance measures that minimize potential impacts on your business.

The full story

In the wake of the two-year anniversary of Moscow’s invasion of Ukraine, the U.S. Department of Commerce announced new export controls and sanctions against Russia-related exports to restrict Russia’s access to the products and technologies needed to sustain the war. These measures involved expanding the Bureau of Industry and Security’s (BIS) Entity List, a list of foreign persons, businesses, and organizations that are subject to specific license requirements for exporting/or transferring specified items as a result of potential national security, foreign policy, or proliferation concerns.

Sanction Targets

These measures included nearly 100 additions to the Entity List as well as over 500 sanctions designations by the Departments of Treasury and State. Effective February 23^rd, the new policies target entities in Russia, China, India, Kyrgyzstan, South Korea, Turkey, and the United Arab Emirates that have enabled Russia’s ongoing defense programs, particularly those involved with illegally shipping U.S. goods to Russia. The BIS has designated more than 50 entities from Belarus in particular that will be subjected to a license requirement for all items regulated under the Export Administration Regulations (EAR). Aside from a few exceptions for food and medicine, the licenses for these items will be reviewed either under a policy of denial or presumption of denial.

The sanctions are intended to target several specific groups, including over two dozen foreign sanctions evaders (FSE) in Europe, East Asia, Central Asia, and the Middle East, hundreds of companies with ties to Russia’s military and weapons manufacturing, parties that provided Russia revenue from energy sales, and Russian officials responsible for the death of Russian opposition leader Alexei Navalny.

High-Priority Import Items

In addition to the new restrictions, the U.S. has collaborated with the E.U., the U.K., and Japan to expand the list of high-priority items that Russia is seeking to import in support of its war campaign. Some of these items include various electronic components, quality testing equipment for electrical systems, and Computer Numerically Controlled (CNC) machine tools, amongst other tiers of parts and materials.

The U.S. issued a new business advisory to inform companies about Russia-related export control risks and encourage them to adopt appropriate procedures to counteract such risks. The entities that can expect an impact from the new sanctions are primarily exporters and re-exporters, such as manufacturers, distributors, resellers, and freight forwarders, as well as their service providers, such as financial institutions, logistics companies, and transportation providers. The Department of Commerce warns that any violations of the U.S. export controls and sanctions laws can result in significant civil or criminal liability.

In summary

The policies around these sanctions and export controls are constantly evolving as Russian conflict endures. While navigating the new rules can be complex, staying updated on these policies is critical for ensuring your business is compliant with guidance from BIS and other U.S. government agencies. Schedule a meeting with Aprio’s team of Tariffs and Customs experts to walk through your current export transactions and determine appropriate compliance procedures for your business.

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