In the midst of the ongoing Department of Justice investigation into the Trump campaign ties with Russian officials, on June 15, 2017, the US Senate voted 98-2 to pass a comprehensive Russia sanctions package. These measures were offered as an amendment to, and largely overshadowed, separate Iran sanctions legislation – the Countering Iran’s Destabilizing Activities Act of 2017 (S. 722).
On April 18, 2017, the US Commerce Department’s Bureau of Industry and Security (“BIS”) issued a final rule revising the Entity List entry for the Russian Federal Security Service (“FSB”), Russia’s principal security agency, in order to permit certain exports, reexports, and in-country transfers to the FSB without a BIS license in conformance with Cyber-related General License No. 1 (“General License No. 1”), which was issued by the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) on February 2, 2017. Today’s change by BIS should further alleviate concerns of US technology companies that need to deal with the FSB in its regulatory role in approving the import, distribution, and use of encryption products in Russia.
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 January 4, 2017, the US Commerce Department’s Bureau of Industry and Security (“BIS”) added five Russian parties to its Entity List. The move follows the issuance of amended Executive Order 13694 (“Cyber EO2”) on December 29, 2016 and the subsequent designation of five Russian entities and four individuals on the US Treasury Department’s Office of Foreign Assets Control’s (“OFAC”) Specially Designated Nationals and Blocked Persons List (“SDN List”) (see prior blog post here).