ITAR Restricts Export to Cambodia
The Department of State has amended the International Traffic in Arms Regulations (ITAR) to apply export restrictions on Cambodia. The United States will now deny licenses and other approvals to export and import defense articles and services to Cambodia. These restrictions, which became effective December 9, 2021 reflect a new stance by the U.S.
Specific changes in the final rules apply to CFR § 126.1 country policy chart (d)(2) and adding the nation of Cambodia to paragraph (o). The changes to ITAR also preclude the use of exemptions from licensing or other approval requirements.
The new ruling reflects concerns over the increased presence of the People’s Republic of China (PRC) in Cambodia. These concerns were expressed in a statement by the Department of State on June 1, 2021. The concerns included the China’s military presence and other activities that threaten to erode the sovereignty of Cambodia.
The Department perceives the presence of PRC military bases in Cambodia as a regional security threat. Additionally, government corruption and significant human rights abuses by the country are seen to have negative impacts on U.S.-Cambodia relations. .
Restrictions Also Placed on Cambodia Under EAR.
The Department of Commerce has also increased restrictions on exports to Cambodia under the Export Administration Regulations (EAR). These restriction apply to exports and reexports to, and transfers within the country. The Department of Commerce stated concerns over recent changes in Cambodian foreign policy. It has determined that these changes are posed undermine regional security, U.S. national security, U.S. and foreign policy interests.
Changes the Department of Commerce have made to the EAR include more restrictive licensing of exports to Cambodia:
- Under § 742.4(b)(7) Cambodia has been added the list of countries subject to licensing.
- Cambodia was added to the list of countries subject to military end use and end user controls in § 744.21.
- The nation has been added to the list of countries subject to military intelligence end user and end user controls in § 744.22.
- Additionally Cambodia has been include to Country Group D:5 which lists of arms embargoed countries.
Treasury Department Actions
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Cambodian government officials. The indviduals, Chau Phirun and Tea Vinh, have been designated by the U.S. government as perpetrators of government corruption and human right abuses.
As a result of these sanctions, all property and interests in property in the U.S. are blocked. This also applies to entities that are owned, directly or indirectly by these individuals. These actions were taken under the intent of the Global Magnitsky Human Rights Accountability Act.
The Treasury Department went further by issuing a business advisory on interactions with Cambodia. Special emphasis was placed on activities involving the financial sector, real estate, casinos, and infrastructure.
A Trend of Things to Come
The growing presence in nations by the People’s Republic of China is not likely to diminish. It is likely therefore, that actions taken by the United States against Cambodia are likely to be taken against other nation states. Additionally, these actions may also be taken by U.S. allies and trading partners.
This stresses the need for organizations to remain up to date in their awareness of change in export compliance legislation and be prudent in initiating transactions in countries where actions of this type are likely to occur.
CVG Strategy Export Compliance Expertise
While many export compliance providers offer programs geared toward compliance with a single set of regulations, CVG Strategy offers a harmonized program that will ensure that your company is compliant to all of these regulations. Furthermore we consolidate this program in a collection of documents that can be integrated into a quality management system.
The CVG Strategy team has over 20 years of experience in U.S. export controls. We can help you develop an ITAR Compliance Program appropriate to your organizations requirements and provide training to prevent occurrences. We also have the experience to assist in guidance when unforeseen incidents do occur to develop strategies to prevent future violations.