• Amber Thomas

Department of Commerce announces tightening of export controls

The Commerce Department’s Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to expand license requirements on exports, reexports, and transfers (in-country) of items intended for military end use or military end users in China, Russia, or Venezuela. This could have a major impact on manufacturers who export a broadened list of technologies and other dual-use goods to China.

The new rule, published in the Federal Register on April 28, expands the licensing requirements for exports to China to include “military end users” and “military end use.” Additionally, it broadens the list of items to which the licensing requirements and review policy apply and expands the definition of “military end use.” It also creates a new reason for control and the associated review policy for regional stability for certain items exported to China, Russia, or Venezuela. Lastly, it adds Electronic Export Information filing requirements in the Automated Export System for exports to China, Russia, and Venezuela.

According to the Commerce Department, the rule changes include:

  • Expansion of Military End Use (MEU) and User Controls Expands MEU 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.

  • Removal of License Exception Civil End Users Removes a license exception for exports, reexports, or transfers (in-country) to civilian end-users in countries of national security concern for National Security (NS)-controlled items.

  • Elimination of License Exception Additional Permissive Reexports Provisions Proposes to eliminate certain provisions of a license exception for partner countries involving the reexport of NS-controlled items to countries of national security concern to ensure consistent reviews of exports and reexports of U.S. items.

The new requirements are consistent with the Trump administration’s report released in 2017, the National Security Strategy of the United States. The following year, BIS identified a list of “emerging” technologies that could be subject to tightened export controls, including artificial intelligence, robotics, semiconductors, and advanced manufacturing. This January, BIS issued its first export controls on a technology from the list – artificial intelligence in geospatial imaging. Now that the coronavirus has exposed vulnerabilities in national security, we could see additional tightening of controls.

AMT continues to closely monitor U.S. export control policy actions with respect to emerging technologies, China, and other areas that impact our members. If you have questions or encounter challenges with the export licensing process, contact Paul Freedenberg, AMT’s consultant on export control policy, at (703) 395-6499 or phf0217@gmail.com.