AMENDMENT TO EAR EXPECTED TO HAVE SIGNIFICANT BUSINESS IMPACT

On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) published 3 amendments to the Export Administration Regulations (EAR) which should have a significant impact on business. The three rules are specific to the export, re-export, or transfer of U.S. jurisdiction goods, software, and technology to Chinese, Russian, and Venezuelan entities including both commercial and military end-users.

• Rule One (Federal Register 85 No. 82 FR 23459) expands existing export restrictions on Military End Use/User Controls (MEU) and license requirements controls on China, Russia, and Venezuela to cover military end-users in all three countries, as well as items such as semiconductor equipment, sensors, and other technologies sought for military end use or by military end-users in these countries. Please note that this rule also expands the Electronic Export Information (EEI) filing requirements in the Automated Export System (AES) for all exports to China, Russia, or Venezuela. The new rule will now require filing an EEI for all items destined to China, Russia, or Venezuela regardless of the value of the shipment unless the shipment is specifically eligible for License Exception – GOV.

• Rule Two (Federal Register 85 No. 82 FR 23470) eliminates License Exception Civil End-Users (CIV), for exports, re-exports, or transfer (in-country) to civilian end-users in countries of national security concern for National Security (NS) controlled items.

• Rule Three (Federal Register 85 No. 82 FR 23496) proposes to eliminate certain provisions of a license exception for Additional Permissive Reexports (APR) by requiring a license from BIS for re-exports of certain U.S. origin items from third countries to Country Group D:1 destinations that cannot be exported directly from the United States without a license.

The intent of the three amendments is to prevent efforts by entities in China, Russia, and Venezuela to acquire U.S. technology that could be used in development of weapons, military aircraft, or surveillance technology through civilian supply chains, or under civilian-use pretenses, for military end uses and military end-users.

For more information, please contact your local Noatum Logistics USA representative.