The Group of 7 countries this week are planning to announce new sanctions and export controls against Russia, including measures to target sanctions evasion by third countries, Reuters reported May 14. The new measures, which are expected during the G-7 summit in Japan May 19-21, will seek to further limit Russia’s energy production and target trade that is supporting Russia's military, the report said. U.S. officials also expect G-7 countries to expand export controls over certain categories of goods so that “all exports are automatically banned unless they are on a list of approved items,” the report said. The measures haven’t yet been finalized. The White House didn’t comment.
The Bureau of Industry and Security again renewed the temporary denial order for Russia's Rossiya Airlines, saying the company has continued to illegally operate planes in violation of U.S. export controls, including on flights into and out of Russia going to and from Egypt and Turkey. The agency renewed the denial order for another 180 days from May 12. BIS first suspended the export privileges of the airline in May 2022 (see 2205200008) and renewed the TDO in November (see 2211170050).
Rep. Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, introduced a bill last week that could lead to sanctions on any person or entity “endangering” the Zaporizhzhia nuclear power plant in Ukraine. The New York lawmaker said Russia has begun forced evacuations of the plant’s employees, leaving it “dangerously understaffed.”
The England and Wales Commercial Court rejected commercial bank UniCredit's claim it is not liable in civil proceedings, even where it otherwise would have been held liable, if it held a "reasonable belief" it was acting in compliance with sanctions regulations. The court said this defense did not apply to the bank, forcing UniCredit to pay its debt related to the lease of an aircraft to Russian companies. The court said that while UniCredit believed it was following the U.K.'s Russia sanctions regime by not paying Celestial Aviation Services, UniCredit's real motive was to delay payment to shield its cashflow rather than ensure sanctions compliance.
The EU is proposing a “new tool” to combat sanctions circumvention by penalizing third countries that ship EU goods to Russia, European Commission President Ursula von der Leyen said this week. The measure, part of the EU’s most recent proposed sanctions package against Russia, could allow member states to impose export controls on those third countries.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.
The EU is considering new sanctions on Chinese companies for supporting Russia’s military, the Financial Times reported May 7. The sanctions, which are expected to be discussed by EU member states this week, could target seven Chinese companies for selling equipment to Moscow that could be used in weapons, the report said. The list of companies reportedly includes two companies from mainland China, 3HC Semiconductors and King-Pai Technology, and five based in Hong Kong: Sinno Electronics, Sigma Technology, Asia Pacific Links, Tordan Industry and Alpha Trading Investments. Some of the companies are already subject to U.S. restrictions, including 3HC, which was added to the Commerce Department's Entity List in April for supplying Russia's military (see 2304120039). All EU member states would have to agree to the new measures before they take effect.
Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.
China denied media reports it's exporting drones to the Russian military to be used in Ukraine, the Ministry of Commerce said, according to an unofficial translation. The ministry said China has "strict controls" on drone exports, adding that while there is no international control on civilian drones, many Chinese drone-makers have self-imposed such restrictions. China will continue looking to strengthen its export controls on drones, the ministry said.
A potential Chinese military invasion of Taiwan could lead to an unprecedented level of new sanctions and export controls against Beijing, including U.S. financial sanctions against major Chinese companies and export prohibitions on anything related to the country’s military, trade lawyer David Wolber said. Banks in particular are concerned about the possibility of sweeping financial restrictions, Chloe Cina of Deutsche Bank said, adding that some are beginning to prepare for a worst-case sanctions scenario.