The Department of Commerce’s Bureau of Industry and Security (“BIS”) announced a final rule, effective today, March 29, 2017, to amend the Export Administration Regulations (“EAR”) to remove Zhongxing Telecommunications Equipment Corporation (“ZTE”) and its subsidiary, ZTE Kangxun Telecommunications Ltd. (“ZTE Kangxun”), from the Entity List. ZTE and ZTE Kangxun were originally placed on BIS’s Entity List on March 8, 2016.
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 February 8, 2017, the US Bureau of Industry and Security (“BIS”) announced that it has updated the content of its Export Compliance Guidelines (“Guidelines”) and Audit Module (“Module”) and combined both documents into one “easy-to-use” booklet. We understand that BIS’s primary purpose in updating the Guidelines and Module was to shorten and simplify them because, in BIS’s view, the prior versions of the documents were too long and contained too much unnecessary technical language.
The US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the US Department of State’s Directorate of Defense Trade Control (“DDTC”), and the US Department of Commerce’s Bureau of Industry and Security (“BIS”) have announced increases in the maximum civil monetary penalties (“CMPs”) under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“2015 Act”). This statute requires the agencies to make such adjustments annually by January 15 of each year. These newly adjusted CMPs may be imposed for violations of OFAC sanctions regulations, the International Traffic in Arms Regulations, and the Export Administration Regulations (“EAR”). Although these are the first annual adjustments made under the 2015 Act, they follow initial “catch-up” adjustments that went into effect on August 1, 2016 and were previously described here.