Global developments in Global Export Controls and Sanctions
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The information security section of the EU dual-use regulations, Category 5 Part 2, has been modified to provide a positive list of controls to improve transparency and clarity around the applicability of these controls. The previous versions of Category 5 Part 2 had applied a broad brush control to encryption items and then sought to decontrol by exception.
Our Global Export Controls and Sanctions team at Deloitte aligns all of its efforts around providing trusted services to our clients and partners while also making the world a safer place.
On November 13, 2017 the European Union imposed a military embargo as well as additional restrictive measures against Venezuela under EU Council Decision No. 2017/2074/CFSP and Council Regulation (EU) No.2017/2063. This sanctions regime came in force on its publication date in the European Union Official Journal (November 14, 2017). The aim of the new sanctions are to prevent the “excessive use of violence or abuse of human rights in Venezuela, in light of the recent deterioration of democracy and the rule of law” following massive protests against the Venezuelan President, Nicolas Maduro.
On 8 August 2017, the UK legislator passed a new Regulation imposing additional recordkeeping and reporting obligations related to financial sanctions compliance by UK professionals. The European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017 (“the Regulations”) expands the scope of financial sanctions reporting requirements to additional sectors beyond financial institutions, including auditors and external accountants.
On October 12th, 2017 the U.S. revoked part of its financial sanctions against Sudan.
New York State adopts requirements for transaction monitoring and filtering programmes for financial institutions
Starting January 1, 2017, financial institutions with operations in New York will be required to maintain a risk-based transaction monitoring and filtering programme to ensure that the local financial system is not used for purposes of money laundering, terrorist financing, sanctions violations or other suspicious activities. The new requirements are outlined by the New York State Department of Financial Services (NYSDFS) in a final regulation (the Rule) set forth in Part 504 to Title 3 of the New York Codes Rules and Regulations (NYCRR).
Ladies and gentlemen, the US Office of Foreign Assets Control (“OFAC”) has turned on the General License J sign, so fasten your seatbelt and prepare for take-off! If you are engaged in commercial passenger and/or cargo airline activity, and you are considering or already operating in Iran, please note the following update to US regulations.
For companies handling export-controlled technology, the increasing prevalence of cloud computing and cross-border IT networks raises significant challenges for effective compliance. In a move to accommodate these trends, the US Department of Commerce (“DoC”) has newly defined what they are calling an “encryption carve-out”, which states that the transmission of encrypted technology or software is no longer deemed to be an export/reexport/transfer activity under the EAR, provided certain criteria are satisfied.
On September 1, new definitions of terms used in the International Traffic in Arms Regulations (“ITAR”) and Export Administration Regulations (“EAR”) will enter into effect. This two-part blog post highlights key upcoming changes.
In Part 1 of this two-part post, we focus on new controls on the “release” of technology and technical data. In Part 2 (available here), we look at new rules related to the use of end-to-end encryption for transferring EAR-controlled technology.
In the wake of the results of the UK’s June 23 referendum on EU membership, businesses must assess the impacts of “Brexit” on their operations and prepare to manage the resulting risks. Without a concrete timeline and an understanding of the new regulatory framework, preparing for what may come is incredibly difficult and the country is currently in a state of flux. The well-known British wartime slogan “Keep Calm and Carry On” has come into its own once again at this uncertain time.