Governance, Risk, and Compliance Update

Latest news on Cybersecurity, Global trade (import/export) controls, Enterprise governance, Quality management systems, and federal/country regulatory updates.

 

 


U.S. Office of Foreign Assets Control (OFAC) announced over a $1 Million settlement with Bukit Muria Jaya (BMJ), a paper products manufacturer located in Indonesia. BMJ was fined for its civil liability for 28 violations of the North Korea Sanctions Regulations, 31 C.F.R. part 510. As U.S. Department of the Treasury stated, BMJ exported cigarette paper to persons and companies located in or doing business on behalf of the North Korea, also using an intermediary company in China that procured cigarette paper from BMJ on behalf of OFAC-designated Korea Daesong General Trading Corporation (“Daesong”) while Daesong was operating under an alias.

Per U.S. Treasury, the approximate value of Bukit Muria Jaya’s exports to North Korea was close to $1 Millions USD. The company had initially referenced North Korean entities on transactional documents, but at the request of its customers certain employees later replaced such references with the names of intermediaries located in third countries, including on invoices, packing lists, and bills of lading. Bukit Muria Jaya subsequently directed payments for its North Korea related exports to its U.S. dollar bank account at a non-U.S. bank. Several wire transfers related to stated exports to clear through U.S. banks were executed during two years timeframe. In summary, Bukit Muria Jaya have violated North Korea Sanctions Regulations when it caused U.S. banks to:

(i) deal in the property or interests in property of a Specially Designated National or Blocked Person;

(ii) export financial services to the DPRK; or

(iii) facilitate export transactions that would have been prohibited if engaged in by U.S. persons in violation of §§ 510.201, 510.206, and 510.211 of the North Korean Sanctions Regulations.

More information on this OFAC sanctions violation and respective statement on the settlement can be found here.



The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today issued  a General License which authorizes the securities exchanges operated by the U.S. persons to engage in transactions involving securities of Communist Chinese Military Companies.

Direct excerpt from the General License 2, issued by the OFAC on January 14th, is as follows:

“(a) Except as provided in paragraph (b) of this general license, all transactions and activities by securities exchanges operated by U.S. persons prohibited by section 1(a)(ii) of Executive Order (E.O.) 13959, as amended by the E.O. of January 13, 2021, involving publicly traded securities, or any securities that are derivative of, or are designed to provide investment
exposure to such securities, of any entity that is listed on the Office of Foreign Assets Control’s Non-SDN Communist Chinese Military Companies List (NS-CCMC List) after 12:01 a.m. eastern standard time, January 14, 2021, are authorized through 12:01 a.m. eastern time on the date that is 365 days after the date the entity is listed on the NS-CCMC List.

(b) This general license does not authorize any transactions or activities otherwise prohibited by E.O. 13959, as amended, any other E.O. or statute, or any part of 31 C.F.R. chapter V.”

Since the most accurate and up-to-date content of General Licenses are maintained by the OFAC on its website, we suggest the reader to refer to this GL2 here.

OFAC also released a Frequently Asked Questions guidance related to Executive Order 13959 which was released on November 12, 2020 regarding Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies. In this executive order, President Trump had declared a national emergency with respect to the Chinese threat stated in EO 13959 . More information on this Executive Order can be found here. On January 13, 2021, President Trump had amended the EO 13959 by permitting certain limited activities as well as further clarification on terms and activities. More information on this amendment can be found here.



The U.S. government agencies collectively issued an advisory on the Cyber threat posed by North Korea for the international community, network defenders, and the public. The issued advisory highlights the cyber threat posed by North Korea and provides recommended steps to mitigate the threat. According to the U.S. government, the North Korea (DPRK)’s malicious cyber […]

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CMMC-AB (CMMC Accreditation Body) updates the community on its progress in a note submitted to interested parties. Some of the activities, that were undertaken in such a short time since its inception, include the following: CMMC AB has been incorporated as a nonstock corporation in the State of Maryland, with a tax exemption under IRS […]

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Source: U. S. Department of Justice Aiden Davidson has been found guilty on March 2 in U.S. federal court for smuggling goods from the United States to Iran and violating the U.S. sanctions over Iran. According to court documents and statements made in court, Davidson, is a citizen of Iran and a naturalized citizen and […]

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As part of an ongoing review of open general licences and further to notices to exporters, U.K. Department for International Trade published changes that have been made to the list of permitted destinations on a number of Open General Export Licences (OGELs). Here is the brief list of the completed changes: Organization has removed Yemen […]

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Today, the BIS has amended the Export Administration Regulations (EAR) to revise a temporary general license regarding the Huawei and its non-U.S. affiliates. Background: Huawei Technologies Co., Ltd. (Huawei) and sixty-eight of its non-U.S. affiliates were added to the Entity List, this essentially brought a licensing requirement under the EAR regarding the export, reexport, or […]

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Source: The U.S. Department of Justice – Office of Public Affairs     Would you like to ensure your business partner screening process correctly identify Russia specific warnings? Contact us and request demo for Linqs GtradePro Sanctioned Party Screening software. Learn more on the Sanctioned Party Screening process.

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Source: The U.S. Department of Justice Would you like to ensure your business partner screening process correctly identify the North Korea specific warnings? Contact us and request demo for Linqs GtradePro Sanctioned Party Screening software. Learn more on the Sanctioned Party Screening process.    

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Source: U.S. Department of the Treasury – OFAC The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the North Korea Sanctions Regulations and reissuing them in their entirety, in order to implement three recent Executive orders and to reference the North Korea Sanctions and Policy Enhancement Act of 2016 and the […]

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