End -User Restrictions for OFAC SDN Listed Entities

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Mar. 22, 2024
By: Marvin E. McPherson

BIS published a new final rule, amending the Export Administration Regulations (EAR) to close the gap between U.S sanctions regulations and the EAR. The new rule amends the end-user controls of the EAR under part 730-774. The rule expands licensing requirements for the export, reexport, and transfer (in-country) of items subject to the EAR for persons blocked under eleven OFAC-administered sanctions programs listed below. The sanction list identifies persons whose property or interests in property that are or come within the United States or in the possession or control of U.S. persons, wherever located, are blocked pursuant to OFAC review.

1.                  Belarus Sanctions

2.                  Belarus-EO14038

3.                  Russia-EO14024

4.                  Ukraine-EO13660

5.                  Ukraine-EO13661

6.                  Ukraine-EO13662

7.                  Ukraine-EO13685

8.                  Illicit Drugs-EO14059

9.                  Narcotics Trafficking Sanctions Regulations (SDNT)

10.              Foreign Narcotics Kingpin Sanctions Regulations (SDNTK)

11.              Transnational Criminal Organizations Sanctions Regulations (TCO)

This rule expands the EAR controls and enforcement to overlay where OFAC does not currently exercise jurisdiction. This will require non- U.S. entities seek a license to export, re-export and transfer items subject to the EAR to any listed entity for purposes of the above sanction regulations. This includes deemed exports and deemed reexports, and for reexports and transfers (in-country) that would otherwise not involve U.S. persons, which would not be subject to OFAC jurisdiction.

The EAR authorization requirements will honor OFAC general licenses and exemptions to ensure consistency; however, all other requests will be reviewed with a presumption of denial. Violations of this rule will result in EAR and OFAC violations.

The amended rule is another measure in codifying non-U.S.-based parties’ obligations to comply with sanctions and export controls.  If you have any questions surrounding the applicability of sanctions or export controls on your company or a particular transaction, please contact any attorney at Barnes Richardson and Colburn.