On 1 August, the US Commerce Department’s Bureau of Industry and Security (“BIS”) amended the Export Administration Regulations to impose controls on certain items that are for use in Russia’s energy sector and may be used for exploration in or production from deepwater, Arctic offshore or shale projects that have the potential to produce oil or gas. The amendments add two new Export Control Classifications to the Commerce Control List, including many items used in oil and gas exploration, and add a requirement that all exports, reexports or transfers to Russia of items in the new categories and certain existing categories require a licence from BIS if the exporter knows or has reason to know that they will be used in such deepwater, Arctic offshore or shale projects. BIS also has instituted a policy denying the export, reexport or foreign transfer of items for use in such projects.
Also on 1 August, BIS announced that United Shipbuilding Corporation, also known as OSK OAO, a Russian state-owned company that constructs ships for Russia’s navy, was added to the Entity List. As a result, virtually all exports and reexports of US-origin goods and transfers of US-origin technology to United Shipbuilding Corporation require a licence from BIS, and applications for such licences are subject to a general policy of denial. In a separate action, United Shipbuilding Corporation was previously added to the Specially Designated Nationals list by the US Treasury’s Office of Foreign Assets Control (“OFAC”) on 29 July 2014, with the result that its property in the US or in the possession of US persons is blocked.
Please see our Client Update of 8 August for further information.