US Department of Commerce Imposes New Licensing Requirements for Exports to China, Russia and Venezuela
In a final rule released on April 28, 2020, the US Department of Commerce’s Bureau of Industry and Safety …
In a final rule released on April 28, 2020, the US Department of Commerce’s Bureau of Industry and Security (BIS) announced new export control requirements for China, Russia, and Venezuela.
As of June 29, 2020, the BIS will impose an export licensing requirement on a wide range of items intended for “military end users” in China, complementing existing restrictions on exports for “military end use” in China. this country. The rule also expands the definition of “military end use” and the category of items for which a license may be required for exports to China, Russia and Venezuela. These changes expand and harmonize controls for “military end-users” and “military end-users” with the goal of countering the contribution of US-origin commercial items to those countries’ military capabilities. The rule, in 15 CFR § 744.21, applies not only to exports from the United States, but also to re-exports from abroad of covered items, including certain items of American origin and certain items produced abroad. containing content or technology of American origin.
The specific items subject to this new licensing requirement include many items which are considered to be of a civilian nature and which, moreover, are only modestly controlled for export, particularly in the categories of materials, materials processing, electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics, ships, aircraft and propulsion systems. Covered items are identified by their Export Control Classification Number, or ECCN, in Supplement No. 2 to Part 744 of the Export Administration Regulations, accessible through the link above. Of potentially broad interest, even the low-level encryption elements (ECCN 5A992 and 5D992, which include the “mass market” encryption elements with limited encryption functionality) and electronic test equipment and software partners (ECCN 3A992 and 3D991) will be subject to the new rule. .
When exporting or re-exporting covered items directly or indirectly to China, Russia and Venezuela, this rule will require careful diligence to understand the nature of the ultimate recipients in those countries as well as the intended end use of the the article. This will prove difficult in many cases. “Military end user” includes the military, navy, air force, navies, coast guard, national guard / police, government intelligence and reconnaissance agencies, as well as a wave category of persons or entities whose actions or functions are intended to support »military end uses. The sharply broadened definition of the “military end use” rule will refer not only to articles intended for the use, development or production of a military article (for example, parts, components or sub-systems of weapons), but also to articles which Support the operation, installation, maintenance, repair, overhaul, refurbishment of military items in these countries.
License applications for covered items will be treated under a deemed refusal.
To increase the transparency of U.S. exports to China, Russia and Venezuela, the rule also extends the electronic export information (EEI) filing requirements in the Automated Export System (AES) for those countries. As of June 29, and subject to certain exceptions, all shipments to these countries – regardless of value – will be subject to an EEI deposit (eliminating the exemption that applied to shipments valued at less than 2 $ 500), while the ECCN of an item must be shown in the EEI repository even when it is checked purely for anti-terrorism (AT) reasons.
Also effective June 29, 2020, the BIS will eliminate the CIV license exception, which allows unlicensed exports to certain countries of certain national security controlled items to most civilian end users for civilian end uses in the group. from country D: 1. This will further limit exports to China, Russia, Venezuela and a host of other countries of concern.
Richard L. Matheny III
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Jacob R. Osborn
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Justin C. Pierce
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