Exports to Russia and Yemen Get New Restrictions
© , Sandler, Travis & Rosenberg, P.A. Originally published in the [02/24/2020] issue of the Sandler, Travis & Rosenberg Trade Report. Reprinted by permission.
Requirements for certain exports to Russia and Yemen will be toughened under a new Bureau of Industry and Security final rule that takes effect Feb. 24. BIS states that this rule is the first step in a larger effort to restructure and realign the country groups set forth in Supplement No. 1 to Part 740 of the Export Administration Regulations.
For more information, please contact export compliance attorney Kristine Pirnia.
Russia. This rule removes Russia from more favorable treatment under country groups A:2 (Missile Technology Control Regime) and A:4 (Nuclear Suppliers Group) and adds it to country groups of concern D:2 (nuclear) and D:4 (missile technology). BIS notes that Russia has not been cooperative in allowing it to perform pre-license checks or post-shipment verifications related to U.S.-origin goods, raising concerns about Russia’s lack of accountability for such goods and diversion to unauthorized or prohibited proliferation activities, end-uses, and end-users.
According to BIS, this change means a number of license exceptions are no longer available for exports to Russia and previously eligible items now require a license for export to Russia. BIS is also revising the licensing policy for related items to reflect a presumption of denial consistent with the country group changes.
However, with regard to nonproliferation and missile technology controls, applications for exports and reexports of commodities, software, and technology to Russia in support of U.S.-Russia civil space cooperation activities or commercial space launches will be reviewed on a case-by-case basis.
Yemen. This rule also removes Yemen from more favorable treatment under country group B and adds it to country group D:1 to reflect national security concerns. BIS states that this change addresses concerns about the diversion of U.S.-origin items in Yemen, where an ongoing conflict has fostered the proliferation of small arms, unmanned aerial systems, and missiles, for unauthorized purposes, including prohibited proliferation activities, end-uses, and end-users.
As a result of this change license exceptions LVS (shipments of limited value), GBS (shipments to country group B countries), TSR (technology and software under restrictions), TMP (temporary imports, exports, reexports, and transfers (in-country)), RPL (servicing and replacement of parts and equipment), GFT (gift parcels and humanitarian donations), BAG (baggage), AVS (aircraft and vessels), APR (additional permissive reexports), and ENC (encryption, commodities, software, and technology) are no longer available for shipments to Yemen.
Other changes include the following.
– License applications to export or reexport national security-controlled items to Yemen will be approved when BIS determines, on a case-by-case basis, that the items are for civilian use or otherwise would not make a significant contribution to the military potential of Yemen that would prove detrimental to U.S. national security.
– Restrictions will be imposed on the export, reexport, and transfer (in-country) of certain microprocessors to military end-uses and end-users in Yemen.
– Restrictions on certain exports and reexports to vessels and aircraft located in Yemeni ports or registered in Yemen will become effective.
– Licensing requirements for reexports of the foreign-produced direct product of U.S.-origin technology and software to Yemen will be expanded.