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WorldECR EU facing Crimea sanctions dilemma 2 Russia sanctions: the view from Space 6 Russia and EU sanctions: a German perspective 15 Why non-U.S. companies are concerned 18 about the use of the STA Exception The line between commercial and military 21 jurisdiction over cybersecurity exports An introduction to Brazilian export controls 25 Export controls in UK offshore centres 27 Moving items from the USML to the CCL 32 SpECiAL foCUS: WAShinGTon DC 33 ISSUE 31. May 2014 www.WorldECR.com News and alerts News and alerts U.S. industry welcomes reform of export controls over satellites and related items The U.S. departments of Association welc omed the Commerce and State have changes. In a statement, the published new regulations association’s president, reforming export controls for Patricia Cooper said: ‘This satellites and related items. action marks the end of a 15- The new regulations move year period during which all controls on commercial U.S. satellite exports were communic ations satellites licensed as munitions, and some remote sensing creating unnecessary satellites, along with tens of constraints on U.S. satellite thousands of associated competitiveness inter - parts, components, and nationally. ground terminals, from the ‘The Ad min istrat ion U.S. Munitions List to the issued final rules less than 18 Reform moves control of commercial satellites from the USML to the CCL Commerce Control List months after the U.S. (‘CCL’). reduction in the licensing microelectronic micro - Congress passed legislation In a statement, Under burden on U.S. exporters.’ circuits, and added, ‘In many permitting satellite export Secretary of Commerce Eric A spokesperson for the instances, the updated control reform, with L. Hirschhorn said: ‘For the Commerce Depart ment said regulations also allow the bipartisan and bicameral many American businesses that the items moving to the commercial, scientific and support… With a more that compete in this key CCL include comm uni cations civil satellites transferred to modern regulatory environ - technology sector, it means a satellites that do not contain Commerce jurisdiction to ment for exports in place, we stronger United States classified components, incorporate parts and com - look forward to unleashing defense industrial base, the certain remote sensing ponents listed on the USML the full force of American ability to focus the govern - satellites, spacecraft parts, and remain under Commerce ingenuity and innovation at ment’s limited resources on components, accessories, licensing authority.’ work in the international the technologies and attachments, equipment, or The U.S. Satellite Industry market.’ destinations of greatest systems that are not concern, an increase in the specifically identified in the For further information, see: competitiveness of the U.S. revised category, and all http://www.state.gov/r/pa/prs/ps/2014/05/226014.htm satellite industry, and a radiation-hardened He added: ’As the crisis EU facing Crimea sanctions dilemma in Ukraine deepens, at the time of writing and ahead of In late April, the Reuters be found that at the same of the proposals: ‘Banks and the presidential election, news agency reported it had time support the territorial other stakeholders subject to France and Germany seem seen a document suggesting integrity of Ukraine, do not EU law already struggle to to be pushing other EU that the EU ‘may ban recognize the illegal determine the legality of countries to implement or transactions with financial annexation of Crimea, financial flows to some threaten further economic institutions in Crimea as defend European interests Ukrainian banks. Although sanctions against Russia, part of its response to the in this region and do not those Ukrainian banks may including a potential ban on annexation of the Ukrainian penalize the Crimean not be directly targeted by deals with all banks in peninsula by Russia’. It said people,’ the document said, EU sanctions, guidelines Crimea. the proposals were separate adding that one way to issued by the European ‘Such a move would from other discussions on discourage or penalise Council suggest that, to the considerably increase the the stepping up of sanctions financial institutions in extent they are owned or difficulty in trading in and against Russia if Moscow Crimea that cooperated with controlled by targeted with the region, and could failed to de-escalate tensions the annexation could be to individuals or entities, compound the current in eastern Ukraine. restrict capital movements providing them with funds uncertainty as to how far the The document, it was between the EU and those or economic resources are sanctions affect entities that reported, spelt out practical banks, and bar EU citizens presumed to be problematic. are directly or indirectly difficulties involved in or businesses from carrying This creates uncertainty as related to the targeted implementing sanctions out transactions with them. shareholding structure and individuals and entities, specifically against Crimea, Yohan Benizri, of Sidley other relevant information with important reper - now that it is de facto a part Austin, provided WorldECR may be scarce, if at all cussions possibly extending of Russia:‘Solutions need to with the following analysis available.’ outside the region.’ 2 WorldECR www.worldecr.com News and alerts News and alerts Japan imposes mild sanctions against Russia over the situation in Ukraine In the light of the recent whom remained undisclosed particularly in the shape of same time, will need to take developments in Ukraine, to the public. The Ministry of energy supplies flowing certain measures to prevent Japan has expressed grave Economy, Trade and from Russia to Japan. Ever a negative economic impact concerns over Russia’s Industry (‘METI’) and since the nuclear plant resulting from the sanctions. actions in the annexation of Ministry of Finance (‘MOF’), accident in Fukushima in Although the United the Crimean peninsula. which govern international March 2011, Japan has States has adopted a tough Following the statement of trade and financial suspended the operation of stance against Russia, it is the G7 leaders on April 26, transactions, respectively, all nuclear electricity plants, unlikely that Japan will by which it was agreed that have since kept silent about now mostly relying on follow in its footsteps and all member states would the possibility of imposing imports of natural gas. As a impose similar measures. move swiftly to impose any additional sanctions. At result, the Japanese energy In its press release, sanctions on Russia, the this point in time, no other sector has increased the MOFA stated that ‘Japan will Japanese government sanctions on Russia have import of liquefied natural continue to play a proactive announced its own sanctions been announced (asset gas (‘LNG’) from Russia. role for the diplomatic against Moscow on 29 April freezing, or financial Moreover, about 80% of all solution of the issues 2014. However, they were transaction or export and Japanese exports to Russia surrounding Ukraine,’ limited in scope and were import restriction). Com- are of transportation following the decision made expected to have only a pared to the sanctions equipment and machinery, by the G7 leader, but it is modest impact on business. imposed on Russia by the both of which are important more likely that Japan’s According to a press Unites States and the EU, the cash cows for the Japanese response will continue to release by the Ministry of potential impact of Japan’s industry. stay ‘behind’ the actions of Foreign Affairs of Japan sanctions is insignificant for In these circumstances, if the Unites States and the EU (‘MOFA’), Tokyo agreed ‘to traders. the Japanese government – and remain mild for the stop issuing visas to a total of One of the reasons why tries to expand its sanctions time being. 23 individuals for the time Japanese sanctions are less against Russia over the being’ by imposing travel severe in this situation is the situation in Ukraine, Japan bans on certain Russian increasing economic bond will face a considerable Tatsuya Kanemitsu, individuals, the identity of between the two countries, economic risk, and, at the Ernst & Young, Tokyo UN lifts Ivory Coast diamonds ban and eases arms embargo The UN Security Council has relaxed a Moreover, the resolution also well as supplies intended for use by a ban on imports of diamonds from Côte states that it is no longer necessary to state evacuating its nationals and d’Ivoire as part of its review and declare supplies of non-lethal others for whom it had consular modification of UN sanctions against equipment and the provision of responsibility in the country and that country. technical aid, training or financial supplies intended for use in security Under the newly adopted resolution services intended to enable the Ivorian sector reform, were exempt from the 2153 (2014), member states have security forces to maintain public regime. agreed that ‘in light of the country’s order to the relevant sanctions Ivorian diplomat Youssoufou progress towards implementing the committee. Similarly, supplies Bamba expressed satisfaction with his Kimberley Process Certification intended solely for the support of or country’s progress and declared Scheme and its improved governance use by the United Nations operation in himself hopeful at the possibility of the of the sector,’ the import of rough Côte d’Ivoire (‘UNOCI’), and those Council putting an end to the diamonds by any