Commerce Department Issues Rule Imposing New And Expanded End-User Controls On Sanctioned Parties

On March 20, 2024, the U.S. Department of Commerce Bureau of Industry and Security (BIS) implemented a final rule to add, expand, and reorganize certain end-user controls for people identified on the U.S. Department of the Treasury's Office of Foreign Assets Control's (OFAC) Specially Designated Nationals and Blocked Persons (SDN) List.

The primary effects of this rule are (1) to impose on non-U.S. persons not otherwise subject to OFAC restrictions an obligation not to provide to sanctioned persons items subject to the Export Administration Regulations (EAR) including goods, software, and technology and (2) for any U.S. persons who provide items subject to the EAR to OFAC-designated persons, such a transaction would risk violating both the OFAC and EAR provisions in the same transaction.