Commerce Dept. Moves against Sale of Aircraft to Terrorist-Supporting Iranian Airline

WASHINGTON—The U.S. Commerce Department’s Bureau of Industry and Security (BIS) has acted against five parties who are attempting to sell two U.S. origin aircraft to Caspian Airlines, a designated Iranian airline. The U.S. Department of the Treasury designated Caspian in 2014 for its support for terrorism, sanctions that are not being lifted under the Joint Comprehensive Plan of Action (JCPOA). The action, called a “temporary denial order” (TDO), suspends the export privileges of Ribway Airlines Company Limited, Af-Aviation Limited, Andy Farmer, John Edward Meadows, and Jeffrey John James Ashfield Both aircraft are registered in Gambia and, according to the registration documents, are currently owned by Ribway. Meadows and Ashfield were both involved in brokering the sale of the aircraft to Caspian. On January 16, 2016, pursuant to commitments in the JCPOA, Treasury’s Office of Foreign Assets Control (OFAC) announced a statement of licensing policy (SLP) under which U.S. and non-U.S. persons may request specific authorization from OFAC to engage in transactions for the sale of commercial passenger aircraft and related parts and services to Iran exclusively for civil passenger aviation end uses, so long as such transactions are consistent with U.S. law and do not involve any person on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List). Caspian Airlines, which was designated for its support to the IRGC in August 29, 2014, remains on the SDN List and is ineligible for this favorable licensing policy. “U.S. sanctions imposed on Iran because of its support for terrorism remain in place notwithstanding the implementation of the JCPOA,” noted Commerce Assistant Secretary for Export Enforcement David W. Mills. “BIS continues to actively investigate and enforce U.S. export controls on Iran, especially when those activities are in support of entities that have been designated for their support for terrorism,” he added.


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HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania and the Office of Export Enforcement of the United States Department of Commerce announced that FIMCO, an Iranian corporation, was sentenced today to pay a $100,000 criminal fine by United States District Court Judge Yvette Kane in Harrisburg for conspiracy to evade export licensing requirements. The conspiracy was in connection with an attempt to smuggle to Iran a machine with possible military as well as civilian applications. According to U.S. Attorney Peter Smith, in December 2012, a federal grand jury in Harrisburg charged FIMCO in a sealed indictment made public in July 2015. In April 2014, an American company, Hetran, Inc., an engineering and manufacturing corporation in Orwigsburg, Schuylkill County, Pennsylvania, and its President, Helmut Oertmann, were charged with participating in the conspiracy. A guilty plea was entered on behalf of the corporation in July 2015 before United States Magistrate Judge Susan E. Schwab. Hetran manufactured a large horizontal lathe, also described as a bar peeling machine (“peeler”), valued at more than $800,000 and weighing in excess of 50,000 pounds. The machine is used in the production of high grade steel for the manufacture of automobile and aircraft parts. Under U.S. law and regulations, American companies are forbidden to ship “dual use” items (items with civilian as well as military or proliferation applications), such as the peeler, to Iran without first obtaining a license from the U.S. Government. Aware that it was unlikely that such a license would be granted, FIMCO, which does business in Dubai, United Arab Emirates, and other alleged co-conspirators agreed to falsely state on the shipping documents that the enduser of the peeler was Crescent International Trade and Services FZE (Crescent), an affiliated company, knowing that the machine would subsequently be shipped to Iran after being offloaded in Dubai. In June 2012, Hetran caused the peeling machine to be shipped from Pennsylvania to Dubai in the United Arab Emirates, fraudulently listing Crescent as the end-user, knowing that the shipment was ultimately being sent by FIMCO to Iran in violation of federal law. The Office of Export Enforcement, Bureau of Industry and Security (BIS), U.S. Department of Commerce detected the shipment and ordered that it be re-delivered to the United States. The seizure of key shipping documents, emails and correspondence from Hetran to Iran revealed the scheme, and was critical to the success of the case, and to shutting down the contemplated shipment. As part of its plea agreement with the United States, FIMCO agreed that the government would recommend a criminal fine. The company also has agreed under a settlement with BIS to pay a $837,500 civil penalty to the U.S. Department of Commerce, of which it paid $587,500 out-of-pocket, with the remaining $250,000 suspended for two years. The suspended portion of the civil penalty will be waived thereafter so long as FIMCO complies with the terms of the plea agreement and any criminal sentence and satisfies certain additional conditions. FIMCO will also be made subject to a two-year suspended denial of its export privileges. “The penalty imposed today, together with the six-figure administrative penalty being paid by FIMCO to the Department of Commerce, reflects the seriousness of the violation, said Under Secretary of Commerce Eric L. Hirschhorn. The Office of Export Enforcement will continue to pursue and fully prosecute those who violate our export control laws and threaten our national security.” During the investigation by the Department of Commerce’s Bureau of Industry and Security (BIS), FIMCO and Crescent were placed on BIS’s Entity list in August 2014. The Entity List identifies foreign parties that are prohibited from receiving listed items unless the exporter secures a license. Those persons present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism, or other activities contrary to U.S. national security or foreign policy interests. By publicly listing such persons, the Entity List serves as an important tool to prevent unauthorized trade in such items. In December 2014, Helmut Oertmann and Hetran were sentenced by Judge Kane to 12 months’ probation; Oertmann and Hetran were ordered as part of a settlement with BIS to pay a penalty of $837,500 with $337,500 of that amount paid out-of-pocket and the remainder conditionally suspended, which penalty Judge Kane adopted as to Oertmann and Hetran. The other indicted company, Crescent International Trade and Services FZE, and the three Iranian individuals who served as officers of FIMCO, Khosrow Kasraei, Reza Ghoreishi, and Mujahid Ali, are presently fugitives. The case was investigated by the New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security, Department of Commerce. The Department of Commerce’s Office of the Chief Counsel for Industry and Security handled the civil proceedings. The prosecution was handled by Assistant U.S. Attorney Christy H. Fawcett and was overseen by the National Security Division of the U.S. Department of Justice.

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Treasury Sanctions Those Involved in Ballistic Missile Procurement for Iran

WASHINGTON – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today designated 11 entities and individuals involved in procurement on behalf of Iran’s ballistic missile program.  OFAC sanctioned Mabrooka Trading Co LLC (Mabrooka Trading) – based in the United Arab Emirates (UAE) – and its China- and UAE-based network that have been involved in procuring goods for Iran’s ballistic missile program.  This network obfuscated the end user of sensitive goods for missile proliferation by using front companies in third countries to deceive foreign suppliers.  Also designated today are five Iranian individuals who have worked to procure ballistic missile components for Iran.  This action is consistent with the U.S. government’s commitment to continue targeting those who assist in Iran’s efforts to procure items for its ballistic missile program.
“Iran’s ballistic missile program poses a significant threat to regional and global security, and it will continue to be subject to international sanctions,” said Adam J. Szubin, acting Under Secretary for Terrorism and Financial Intelligence.  “We have consistently made clear that the United States will vigorously press sanctions against Iranian activities outside of the Joint Comprehensive Plan of Action – including those related to Iran’s support for terrorism, regional destabilization, human rights abuses, and ballistic missile program.”
Hossein Pournaghshband and his company, Mabrooka Trading, are being designated pursuant to Executive Order (E.O.) 13382 for having provided, or attempting to provide, financial, material, technological, or other support to Navid Composite Material Company (Navid Composite), an entity sanctioned in connection with Iran’s ballistic missile program.  Navid Composite was designated in December 2013 pursuant to E.O. 13382 as an Iran-based subsidiary of U.S.- and UN-designated Sanam Industrial Group, an entity sanctioned for its involvement in Iran’s ballistic missile program.  At the time of its designation, Navid Composite was contracting with Asia-based entities to procure a carbon fiber production line in order to produce carbon fiber probably suitable for use in ballistic missile components.  Since at least early 2015, Pournaghshband used his company, Mabrooka Trading, to procure materials and other equipment for Navid Composite’s carbon fiber production plan.  Pournaghshband is also being designated today pursuant to E.O. 13382 for having provided, or attempting to provide, financial, material, technological, or other support to Mabrooka Trading.
Chen Mingfu is being designated pursuant to E.O. 13382 for having provided, or attempting to provide, financial, material, technological, or other support to Navid Composite and Mabrooka Trading.  Anhui Land Group Co., Limited is also being designated pursuant to E.O. 13382 because it is owned or controlled by Mingfu and for having provided, or attempting to provide, financial, material, technological, or other support to Mabrooka Trading and Pournaghshband.  Mingfu brokered deals in support of Mabrooka Trading and Pournaghshband’s efforts to procure materials and equipment for Navid Composite’s carbon fiber production line.  Mingfu, using Hong Kong based-Anhui Land Group Co., Limited, provided logistical support to Mabrooka Trading and Navid Composite.
Candid General Trading is being designated pursuant to E.O. 13382 for having provided, or attempting to provide, financial, material, technological, or other support to Mabrooka Trading and Pournaghshband.  Rahim Reza Farghadani, the Managing Director of Candid General Trading, is also being designated pursuant to E.O. 13382 for acting for or on behalf of Candid General Trading.  Candid General Trading has conducted financial transactions for Mabrooka Trading and Pournaghshband for goods intended for Navid Composite.
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Chinese enterprises continue to grow business in US in 2015

NEW YORK — The relationship between Chinese and US economies continued to grow in2015, with China surpassing Canada to become the US’s largest trading partner inNovember, the China General Chamber of Commerce-USA (CGCC) said Tuesday.

More than 800,000 American jobs depend on goods and services sold to China, the CGCCsaid in the 2015 White Paper, in a notable sign that trade relations with China helped boostthe US economy and local jobs market.

Meanwhile, Chinese direct investment in the United States in 2015 will likely have exceededthe 10 billion US dollars benchmark for the third year since 2013, totaling nearly 60 billiondollars since 2000, said the CGCC, the largest non-profit organization representing Chineseenterprises in the United States.

“The results of this year reflected the confidence of Chinese enterprises to continue growingtheir business in the US market,” said Chen Xu, chairman of CGCC, at the launching of theWhite Paper.

“The past 2015 witnessed a successful development of China-US trade and economicrelationship. Bilateral trade volume reached over 558 billion US dollars. Although world tradeis sluggish, China-US trade managed to increase,” said Zhu Hong, minister for commercialaffairs at the Chinese Embassy to the United State.

“On the investment front, more and more Chinese executives and entrepreneurs are planningto do businesses in the US By 2015, there are more than 2,000 Chinese firms settling in theUS with a total investment of nearly 60 billion dollars,” Zhu added.

Chinese companies were benefiting from economic growth in the United States, the WhitePaper said, citing that 60 percent of respondents to the CGCC survey noted that their annualrevenues increased in 2014.

“To gain US market share” continued to be the top business objective for Chineseenterprises, according to the Annual Business Survey Report on Chinese enterprises in theUS released by the CGCC Tuesday.

Respondents paid rising attention to acquiring advanced management concept and skills.About 91 percent of respondents expected revenue increase in the next three to five years,while 52 percent of respondents reinvest their US profits into the country.

The United States was attracting a growing number of Chinese companies due to itsoutstanding business environment, policies that promote innovation, business standards, andbusiness accountability, the White Paper said.


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Statement Relating to the Joint Comprehensive Plan of Action “Implementation Day” of January 16, 2016

Implementation Day Statement:

On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States), the European Union, and Iran reached a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful. October 18, 2015 marked Adoption Day of the JCPOA, the date on which the JCPOA came into effect and participants began taking steps necessary to implement their JCPOA commitments.  Today, January 16, 2016, marks Implementation Day of the JCPOA.  On this historic day, the International Atomic Energy Agency (IAEA) has verified that Iran has implemented its key nuclear-related measures described in the JCPOA, and the Secretary State has confirmed the IAEA’s verification.  As a result of Iran verifiably meeting its nuclear commitments, the United States is today lifting nuclear-related sanctions on Iran, as described in the JCPOA.
In connection with reaching Implementation Day, today the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued several documents.  Specifically, OFAC posted to its website: Guidance Relating to the Lifting of Certain Sanctions Pursuant to the Joint Comprehensive Plan of Action on Implementation Day; Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA) on Implementation Day; General License H: Authorizing Certain Transactions relating to Foreign Entities Owned or Controlled by a United States Person; and a Statement of Licensing Policy for Activities Related to the Export or Re-Export to Iran of Commercial Passenger Aircraft and Related Parts and Services. The aforementioned documents are effective today, January 16, 2016.
OFAC has also published to its website additional information regarding actions to give effect to other JCPOA commitments, including removals from the Specially Designated Nationals and Blocked Persons List, the Foreign Sanctions Evaders List, and/or the Non-SDN Iran Sanctions Act List, as appropriate.  In addition, OFAC has made available on its website a list of persons identified as blocked solely pursuant to Executive Order 13599 (“E.O. 13599 List”), which consists of persons that OFAC previously identified as meeting the definition of the Government of Iran or an Iranian financial institution.  Information regarding these changes to OFAC’s sanctions lists is available on OFAC’s Recent Actions website. This information will be published subsequently in the Federal Register.
Implementation Day also marks the close of the Joint Plan of Action of November 24, 2013, as extended (JPOA), including the provision of sanctions relief pursuant to the JPOA.
Effective Implementation Day, all specific licenses that: (1) were issued pursuant to OFAC’s Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry, and (2) have an expiration date on or before July 14, 2015, are hereby authorized to remain in effect according to their terms until May 31, 2016.
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China to sink billions into new airports this year

China is to invest about 77 billion yuan ($11.7 billion) this year on the construction of civil aviation infrastructure, especially airports, according to the Civil Aviation Administration of China.

The agency said it will step up construction of important new airports, including those in Beijing, Chengdu, Qingdao, Xiamen and Dalian.

Eleven key infrastructure projects and 52 upgrades or expansion work on civil aviation facilities will be started this year, the administration said in a statement.

It said work on Beijing’s second international airport, the largest construction project in Chinese civil aviation history, is progressing well.

Work on the terminal and air traffic control facilities began in September and construction of support facilities is expected to start in June.

The airport is scheduled to be completed in June 2019 and to become operational in December that year, the administration said.

The civil aviation agency will also work with the National Development and Reform Commission, the country’s top economic planner, to publish a blueprint this year on the locations of new civil airports to be built before 2030, according to the statement.

Dong Zhiyi, a deputy director at the administration, has said China plans to build 66 new civil airports in the next five years, taking the number of such airports on the Chinese mainland to 272 from 206.

Demand has been rising for air travel, spurring the development of more airports.

According to the National Tourism Administration, Chinese travelers made more than 4 billion trips to domestic destinations last year. They also made 120 million trips abroad, an increase of 16 percent year-on-year.

The civil aviation administration said Chinese made 440 million trips by air last year and predicted that the figure could rise to 485 million this year.

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