On April 19, the US Government issued a fact sheet outlining a new policy (the “New UAS Policy”) on exports of US-origin unmanned aerial systems (“UAS”) and a new National Security Presidential Memorandum (“NSPM”) updating the United States Conventional Arms Transfer Policy (the “New CAT Policy”). These changes do not directly impact the export licensing requirements on UAS under the International Traffic in Arms Regulations (“ITAR”) or the Export Administration Regulations (“EAR”). However, according to statements made in a press briefing on these developments, the new policies reflect the Trump Administration’s interest in enabling US manufacturers of UAS to “level the playing field” and increase exports of these products to US allies and partners. They also evidence a broader effort to increase considerations of economic interests in arms transfer decisions.
On March 22, 2018, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a final rule (the “Final Rule”) adding, in relevant part, 15 South Sudanese entities to the Export Administration Regulations’ (“EAR”) Entity List — a step that increases the pressure on that country following the US Government’s imposition of an arms embargo last month. All 15 entities are subject to a license requirement for all exports, reexports, or in-country transfers of items subject to the EAR, and new license applications for these entities are subject to a presumption of denial.
The US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the US State Department’s Directorate of Defense Trade Control (“DDTC”), and the US Commerce Department’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”).