On December 9th, the US government added Cambodia to the naughty list by implementing stricter controls amid the country’s continued human rights abuses, growing corruption, and the deepening of Chinese military influence there. Both the Department of State and the Department of Commerce published new rules which place significantly stricter restrictions on Cambodia.
State Department Restrictions
The Directorate of Defense Trade Controls (DDTC) has placed an Arms Embargo on Cambodia meaning that all exports and imports of defense articles and services destined for or originating in Cambodia that are subject to the ITAR are prohibited. This also comes with a policy of denial, meaning any licenses will be denied with the exception of defense articles and services in furtherance of conventional weapons destruction or humanitarian mine action activities (these will be reviewed on a case-by-case basis).
Department of Commerce Restrictions
The Bureau of Industry and Security (BIS) has also placed additional restrictions on Cambodia through four specific actions:
- Licensing Policy: The new regulations add Cambodia to the list of countries subject to the licensing policy in 742.4 (b)(7) for National Security (NS) controlled-items. These controls subject Cambodia to additional reviews for diversion risk to a military end use or end user. If it is determined that the items will be for civil end use to a civil end user, the license will likely be approved. However, there is a presumption of denial for items destined for a military end-use and/or user.
- 744.21: BIS also added Cambodia to the list of countries subject to military end use and end user restrictions (MEU) in 744.21. This prohibits export, reexport, or transfer of specific items listed in Supplement 2 to part 744 to Burma, China, Russia, and Venezuela. Licenses for these purposes will be reviewed with a presumption of denial.
- 744.22: Cambodia was added to the country list in 744.22 placing additional restrictions on any export, reexport, or transfer if there is knowledge that the item is intended for a military-intelligence end use or military-intelligence end user. Cambodia joins Burma, Russia, China, Venezuela and the E:1 and E:2 countries already on this list. License applications are reviewed with a presumption of denial.
- Country Group D:5: In conjunction with DDTC adding Cambodia to the list of proscribed countries, BIS has added Cambodia to Country Group D:5, which is the list of U.S. Arms Embargoed Countries. This tightens restrictions on de minimis U.S. content, license exception availability, and licensing policy for certain items.
Cambodia is likely to be on the export naughty list for the foreseeable future, so be sure to check the export regulations twice if you plan on transacting business there. If you need assistance in determining if your shipment is subject to these additional restrictions, contact Export Solutions for a free consultation today.
Emmalie Armstrong is a Trade Compliance Consultant with Export Solutions – a firm specializing in U.S. import/export regulations.