On February 24, 2020, the Bureau of Industry and Security (BIS) issued a Federal Register Notice revising the Country Group designations for Russia and Yemen based on national security, foreign policy, and proliferation-related concerns. BIS stated that this action was “intended to facilitate and support accountability in connection with exports and reexports of items” to Russia and Yemen and is also part of a “larger effort to restructure and re-align the Country Groups” based on these same interests.
Changes for Russia
Specifically, this rule removes Russia from Country Groups A:2 (Missile Technology Control Regime) and A:4 (Nuclear Suppliers Group) and adds Russia to Country Groups of concern D:2 (Nuclear) and D:4 (Missile Technology) from Supplement No. 1 to Part 740 and also adds NP controls to Russia in Supplement No. 1 to Part 738, the Commerce Country Chart.
As a result of these revisions, many license exceptions are no longer available for Russia and there are now additional licensing requirements for items, including EAR99 items. For example, by adding Russia to Country Group D:4, the prohibitions in Part 744.3 (a)(1) and (3)- Restrictions on Certain Rocket Systems (including ballistic missiles, space launch vehicles and sounding rockets) and Unmanned Aerial Vehicles End-Uses, now apply. Therefore, EAR99 items with an unmanned aerial vehicle end use wishing to be exported to Russia will now require a license and BIS states that there is a presumption of denial of that license application.
BIS advises that these amendments are consistent to address U.S. concerns about Russia’s lack of cooperation and accountability for U.S.-origin items and diversion to unauthorized or prohibited activities, end uses, and end users. Additionally, BIS highlighted that Russia has not been cooperative in allowing BIS to perform pre-license checks or post-shipment verifications related to U.S. origin goods and further notes that this “accentuates the seriousness that the U.S. takes Russia’s use of a “novichok’ nerve agent in the attack against Sergei Skripal and his daughter Yulia Skripal in the United Kingdom on March 4, 2018.”
Changes for Yemen
In this same rule, BIS removes Yemen from Country Group B and adds Yemen to Country Group D1 for national security concerns. Similar to Russia, these changes were made to address concerns about diversion of U.S.-origin items in Yemen for unauthorized purposes including prohibited proliferation activities, end uses and end users. BIS also notes that the ongoing conflict in Yemen has fostered “international terrorism and instability in the Arabian Peninsula, including the proliferation of small arms, unmanned aerial systems and missiles.”
The Bottom Line
Bottom line for exporters? Be aware of basic export questions to ask when evaluating the export requirements for each transaction. This is important for items with an ECCN on the Commerce Control List (CCL), but also for EAR99 items.
What are you exporting?
Where are you exporting?
For what end use are you exporting?
Who are you exporting to?
Lastly, make sure you always consult the most recent edition of the regulations. The regulations change and something that was able to be exported last month, could now have restrictions.
If you have concerns on how these changes might affect your company or would like further information on end-use controls, contact Export Solutions for a free consultation.
Rebecca Yeager is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm that specializes in helping companies comply with U.S. and international import/export regulations.