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Lloyd Grove

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Ending several weeks of speculation about a shift in US policy towards Cuba, on June 16, 2017, President Trump announced changes reversing some of the steps undertaken by the Obama administration to ease the decades-long US embargo of that country. He has directed US government agencies, including the Treasury Department’s Office of Foreign Assets Control (“OFAC”), which is responsible for the administration of the US sanctions against Cuba, to “initiate a process to adjust” their respective regulations within 30 days to implement the changes.  Importantly, FAQs issued by OFAC clarify that the 30-day deadline is only to begin the process of amending the regulations and that the announced changes will not take effect until new or amended regulations are issued.  Otherwise, no deadline for when the regulations must be amended is specified and OFAC states only that it “expects to issue its regulatory amendments in the coming months.”

Ending a five-year investigation, ZTE Corp. (“ZTE”), the second-largest producer of telecommunications equipment in China, entered into a plea agreement with the US Department of Justice (“DOJ”) and settlement agreements with the US Department of Commerce’s Bureau of Industry (“BIS”) and the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”), for violations of US sanctions against Iran and US export controls, making false statements to the US government, and obstruction of justice (complete plea/settlement agreements are available at the following links: DOJ, BIS and OFAC). If the criminal plea with the DOJ is approved by a federal judge, the combined $1.19 billion in penalties would be the largest fine and forfeiture ever levied by the US government in an export control case.

On December 29, 2016, the US government announced several measures in response to the Russian government’s alleged “aggressive harassment of U.S. officials and cyber operations aimed at the U.S. election.” The measures impose sanctions against nine Russian parties, including the Russian Federal Security Service (“FSS” or “FSB”).  In addition, the US government announced the expulsion of 35 Russian diplomats from the United States and the closing of two US properties for their alleged intelligence operations.  As a result of the sanctions, US companies will now likely require US government authorization prior to dealing with the FSB, which can include submissions to or the receipt of approvals from the FSB to market or distribute certain encryption products in Russia or participation in certain other regulatory actions before the FSB.