US Expands Licensing Requirements for Russia and Belarus to Include All Trade Control List Items – International Law

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United States: US Expands Licensing Requirements for Russia and Belarus to Include All Trade Control List Items

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To further intensify pressure in response to Russia’s ongoing invasion of Ukraine, including the apparent massacre of civilians by Russian soldiers in Bucha last week, April 9, 2022, the Bureau of Industry and Department of Commerce (“BRI”) has issued a final rule expanded sanctions against Russia and Belarus under the Export Administration Regulations (“EAR”). This rule extends the BIS license requirement on the export and re-export of U.S.-origin products, software and technology and certain foreign-produced products, software and technology to Russia and Belarus to include all Trade Control List (“CCL”) items. The rule also revokes the availability of the AVS (Aircraft, Vessels and Spacecraft) license exception for aircraft registered, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. This rule comes into effect on April 9, 2022.

Commerce Secretary Gina M. Raimondo said, “Last weekend’s horrific revelations are further proof that Russia’s brutality must be sternly opposed by the international community. The Commerce Ministry is using the authorities at its disposal to respond to Putin’s depravity. She added: “Today’s action by the BRI, in cooperation with our allies and international partners, shows that we will continue to pressure the strategic sectors of Russia and Belarus to downgrade their military capabilities.

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In further response to the Russian offensive in Ukraine, BIS imposed significant restrictions on Russia and Belarus by amending the EAR to impose a licensing requirement on all CCL items, which expands US controls to almost any dual-use technology, software or product that could be used to support Russia’s war against Ukraine.

Specifically, this rule expands the licensing requirement that was previously imposed on Russia and Belarus to include items classified under any Export Classification Control Number (“ECCN”) in categories 0 through 2 of the CDC. Categories 0 to 2 include materials and equipment related to nuclear, chemical and materials processing. While the vast majority of items in categories 0 to 2 already required a license for Russia and Belarus, this rule imposes new licensing requirements for other items, including certain composite materials, medical products containing toxins or genetically modified organisms, hydraulic fluids, pumps, valves, and lower level machine tools. With few exceptions, BIS will consider license applications involving all of these CCL elements under a denial policy.

The new rule also limits the availability of the AVS license section by excluding aircraft registered, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. Previously, the BRI imposed similar restrictions on the availability of AVS for aircraft registered, owned or controlled by, or chartered or leased by Russia, or by a Russian national; the most recent rule imposes the same restrictions in Belarus.

Finally, the rule contains a safeguard clause that allows any shipment of items subject to EAR only under the Russian version of the Foreign Direct Product Rule, which were already subject to a licensing requirement, and en route to May 9, 2022, to continue to their destination without an additional license. All other shipments subject to EAR that were en route on April 8, 2022, which previously did not require a specific license, may also proceed to their destination.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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