U.S. restrictions on exports of controlled items to Russia are being actively enforced and violations can lead to criminal and civil penalties, a senior federal official said recently.

Matthew Axelrod, assistant secretary of commerce for export enforcement, said in a recent speech that these restrictions “have had significant impact to date” and that Bureau of Industry and Security enforcement agents have taken the following steps to enforce them.

Screening – When someone files paperwork saying they are shipping something potentially covered by the new controls, Axelrod said, using screening mechanisms that have been implemented to identify all relevant exports to Russia “we’ll see it and then we can stop it.” Since the first restrictions took effect Feb. 24 BIS has prevented 145 shipments worth nearly $76 million from going to Russia.

Entity List – BIS has placed more than 250 companies with Russian defense affiliations on the Entity List, which means they cannot receive U.S. exports without a license and that applications for such licenses will be denied. Axelrod said these companies include Russia’s two leading indigenous integrated circuit manufacturers as well as space-based and satellite-based component manufacturers and suppliers, unmanned aerial vehicle manufacturers and suppliers, and shipbuilding factories.

Inspections – BIS staff overseas is regularly conducting physical inspections to make sure banned items are not making their way to Russia. These inspections can lead to the
imposition of criminal and civil penalties.

Education – Axelrod said BIS knows which U.S. companies had been exporting currently restricted items to Russia prior to the imposition of the new controls and is reaching out to them both to educate them on the new controls and to make sure they are in compliance.

Aircraft – BIS has publicly identified 176 airplanes it believes were illegally exported to Russia and another seven it believes went illegally to Belarus. U.S. or foreign companies that service these aircraft “are in violation of our laws and do so at their peril,” Axelrod said. BIS has also issued temporary denial orders against four Russian airlines, including a cargo carrier, which effectively prohibit them from receiving U.S. parts for their airplanes.

For more information on the wide range of trade restrictions the U.S. has imposed on Russia and how to ensure your company is in compliance, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.

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