On February 2, 2017, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a general license (“General License 1”) permitting certain limited transactions with the Russian Federal Security Service (“FSB”), Russia’s principal security agency.  FSB was designated by OFAC as a Specially Designated National (“SDN”) on December 29, 2016 and subsequently also added to the US Commerce Department’s Entity List on January 4, 2017. FSB remains designated, but OFAC’s General License 1 is a welcome step towards alleviating concerns of US technology companies over the need to deal with FSB in its regulatory role in approving the import, distribution, and use of encryption products in Russia, as well as its broader law enforcement role. Meanwhile, the US Commerce Department’s Bureau of Industry and Security (“BIS”) has yet to take parallel action to authorize exports, reexports, and transfers to FSB of goods, software, and technology subject to US jurisdiction under the Export Administration Regulations (“EAR”).
On September 20, 2016, the Bureau of Industry and Security (“BIS”) published a final rule in the Federal Register implementing the 2015 Wassenaar Arrangement Plenary Agreements and that also included changes to a number of encryption-related provisions in the Export Administration Regulations (“EAR”). BIS described the changes as a “minor relaxation” intended to streamline and make more efficient the encryption requirements of the EAR. At the same time, BIS made clear that it considers the scope of encryption controls and the related License Exception ENC relatively unchanged. Key changes include:
The US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the US Department of State’s Directorate of Defense Trade Controls (“DDTC”), and the US Department of Commerce’s Bureau of Industry and Security (“BIS”) have announced increases in the maximum civil monetary penalties (“CMPs”) that may be imposed for violations of OFAC sanctions programs, the International Traffic in Arms Regulations, and the Export Administration Regulations (“EAR”), respectively. The new maximum penalty amounts come into effect on August 1, 2016.
On March 15, 2016, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) and the US Commerce Department’s Bureau of Industry and Security (“BIS”) announced further amendments (the “Amendments”) to the Cuban Assets Control Regulations (“CACR”) and the Export Administration Regulations (“EAR”), in a continuing effort to implement elements of the policy announced by President Obama on December 17, 2014 and to chip away at the decades-old embargo. The Amendments have been issued in anticipation of President Obama’s inaugural visit to Cuba next week and follow several earlier rounds of relaxation, including those made on January 15, 2015, September 18, 2015, and January 26, 2016. The Amendments went into effect on March 16, 2016.