International Trade Enforcement Roundup | April 2023 Update

What happened? As evidenced by text and email messages, Karpushkin worked alongside Unsalan to help facilitate the transactions between Metalhouse and companies controlled by Kurchenko. The criminal complaint alleges that Karpushkin was knowledgeable of U.S. sanctions regimes, having lived and conducted business transactions in the United States since 2004. In addition, evidence recorded after U.S. Customs and Border Protection (CBP) seized Karpushkin’s phone revealed that Karpushkin had engaged in conversations related to the U.S. sanctions regime, including emailing a business associate a link to the OFAC search tool.

The Karpushkin press release can be found here.

Notably. Attorney General Merrick Garland stated, “[t]he arrest of John Can Unsalan should serve as a warning to those who seek to do business with sanctioned individuals or entities that endanger the security of the United States and our allies.” This is just the most recent example of the DOJ’s interest in holding accountable those who help designated individuals circumvent sanctions. There is a microscope on designated oligarchs, and more criminal indictments in the future seem likely.

Federal Court Orders Forfeiture of $826K in Funds Used in Attempt to Export Dual-Use High Precision Jig Grinder to Russia (DOJ Action)

Those involved. BY Trade OU, an Estonian Entity.

Charges with penalties. One Count of Conspiracy to Violate the Export Control Reform Act (ECRA); One Count of International Money Laundering Conspiracy. What happened? On April 4, a judge ordered By Trade OU to forfeit approximately $342,000 after the company pleaded guilty to one count of conspiracy to violate the ECRA and one count of conspiracy to commit money laundering. The company admitted it received funds from a Russian company for the purchase of a U.S.-origin jig grinder, a tool with dual-use applications covered by the EAR, from a Latvian company. The tool was then to be re-exported to Russia. By Trade OU did not receive the necessary license from BIS. As discussed in our October Enforcement Roundup, three Latvian citizens, a Latvian entity, a Ukrainian national, By Trade OU, other Russian individuals, and a Russian entity conspired to attempt to re-export the jig grinder to Russia but were caught with the help of Latvian law enforcement. On March 29, in a related forfeiture action, the $484,696 paid to the U.S. company that produced the jig grinder was ordered to be forfeited.

The press release can be found here.

Notably. The enforcement action reiterates the repercussions that foreign companies face when violating U.S. export control laws. Even foreign companies are subject to the EAR when dealing in or with U.S.-origin items.

Microsoft to Pay Over $3.3 Million in Total Combined Civil Penalties to BIS and OFAC to Resolve Alleged and Apparent Violations of U.S. Export Controls and Sanctions (BIS and OFAC Action)

Those involved. Microsoft, an American multinational technology company.

Charges with penalties. Seven Counts of Acting with Knowledge of Violation of the Export Administration Regulations (EAR) ($624,013 million in civil penalties); 1,339 Violations of the OFAC Sanctions Regimes involving Ukraine/Russia, Cuba, Iran, and Syria ($2,980,265.86 in civil penalties). What happened? Between July 2012 and April 2019, Microsoft Russia and Microsoft Ireland allegedly committed 1,339 violations of different OFAC sanctions programs. The violations, amounting to more than $12,105,189.79 in sales, stemmed from selling software licenses, activating licenses, or providing related

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