On 16 January 2017, the European Commission published its latest update of the TARIC CN-DU Correlation Table which establishes links between the customs classification codes (HS/CN) and export control classification codes (ECN).
As this correlation table sometimes confuses exporters when determining whether an item is controlled for export , we thought this a good occasion to remind readers of the mechanics of the respective systems. Although the correlation table generally gives a useful ‘indication’ that a certain item could be subject to export control licensing, it should be noted that the two classification systems are in fact very different in scope and objectives.
U.S. law provides the President with broad authority to prohibit transactions that he deems to present a national security threat to the United States. In this context, national security concerns may, but need not, involve information that is trade-controlled or classified.
At the end of 2016, President Obama used this power to block a transaction after the Committee on Foreign Investment in the United States (CFIUS) determined that it threatened the security of the United States due to, among other things, the military applications of the technological capability of the company to be acquired. Notably, neither of the parties to the transaction was based in the United States.
When the United States lifted its nuclear-related sanctions as part of its Implementation of the Joint Comprehensive Plan of Action (JCPOA) in January 2016, it left in place several other sanctions mechanisms that could be implemented against Iran. On February 3, following Iran’s tests of certain ballistic missiles, the United States designated twenty-five (25) additional individuals and entities as Specially Designated Nationals (SDNs) pursuant to certain of these remaining sanctions authorities.
By Susan Kovarovics , 8 February 2017
Specifically, these designations were made pursuant to Executive Order 13382, which targets proliferators of weapons of mass destruction, and Executive Order 13224, which targets parties that commit or support terrorism. According to the press release announcing the designations, several of the parties are identified as part of certain procurement networks for Iran’s ballistic missile program. Others who were designated were linked to the Islamic Revolutionary Guard Corps—Qods Force (IRGC-QF).
Despite changes in 2016 to the U.S. and E.U. sanctions against Iran, “issuers” registered under the U.S. securities laws should remember that certain reporting requirements continue to apply. These requirements stem from the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRSHRA”), which requires that any issuer required to file periodic reports with the U.S. Securities and Exchange Commission (“SEC”) disclose in its quarterly and annual reports information about dealings by the issuer or its affiliates with respect to specified activities involving Iran and certain sanctioned parties.
By Megan Gajewski Barnhill, 27 January 2017