BIS Adds License Exemption Restrictions on Venezuela

The Commerce Department’s Bureau of Industry and Security is amending the Export Administration Regulations (EAR) to remove Venezuela from Country Group B and add it to Country Groups D:1-4, which “lists countries of national security concern” and adds new licensing requirements while restricting the use of certain license exceptions for exports. The changes take effect May 24.

All shipments removed from license exception eligibility, or eligibility for export without a license, as a result of this notice and which are on a loading dock or aboard a carrier before May 24 may proceed to their destination as long as the transfer is completed within 30 days of the notice’s publication, i.e., by June 24. Any products not actually exported, re-exported or transferred before midnight on June 24 will require a license.

Because Venezuela is being removed from County Group B, which “affords favorable treatment for certain exports of National Security-controlled items,” it is no longer eligible for license exceptions for certain technology and software (TSR), shipments of “limited value” (LVS) and shipments to other Country Group B nations (GBS), BIS said. BIS said it made the change because it determined that a review of “national security controlled items” involving Venezuela will “enhance BIS’s ability to protect U.S. national security interests.” Venezuela was previously also listed in Country Group D:5 as a U.S. arms embargoed country, which will not change, BIS said.

The addition of the country to Groups D:1-4 restricts or limits the use of several license exceptions for exports to Venezuela, including for the “temporary imports, exports, reexports and transfers” (TMP), “servicing and replacement of parts and equipment” (RPL), “gift parcels and humanitarian donations" (GFT), “baggage” (BAG), “aircraft and vessels” (AVS), “additional permissive reexports" (APR) and “encryption, commodities, software, and technology” (ENC), the notice said.

The licensing policy for countries in Group D:1 is to approve applications when BIS determines “the items are for civilian use or otherwise would not make a significant contribution to the military potential,” the notice said. Applications to export or re-export national security controlled items to Venezuela will now be subject to this licensing policy, BIS said. Venezuela will also face restrictions under Country Group D:1 on the trade of “certain microprocessors,” and associated software and technology “to military end uses and end users in Venezuela,” BIS said. The notice also restricts exports and re-exports to ships and aircrafts in Venezuelan ports or registered in Venezuela. The addition of Venezuela to Country Group D:1 will also expand licensing requirements for re-exports of “foreign-produced direct product of U.S.-origin technology and software” to Venezuela, the notice said.

In Country Group D:2, licenses are required for the export or re-export of goods relating to nuclear nonproliferation, BIS said. The restrictions also apply if the U.S. person involved in the trade “has ‘knowledge’ of a prohibited end use in or by Venezuela,” according to the notice. For Venezuela, licenses will be required for the export or re-export of items subject to the nuclear nonproliferation column 2 (NP 2) controls (i.e., Export Control Classification Numbers (ECCNs) 1A290, 1C298, 2A290, 2A291, 2D290, and portions of 2E001 and 2E002).

In Country Group D:3, licenses are required for trading of goods relating to chemical and biological weapons, the notice said. License applications for Country Groups D:2 and 3 will be reviewed under the licensing policy of the EAR, the notice said. A license will be required for the export or re-export of items subject to the chemical and biological weapons column 3 (CB 3) controls (i.e., ECCN 1C991.d).

In Country Group D:4, restrictions on trades of “certain rocket systems … and unmanned aerial vehicles” will be “applicable” if the exporter, re-exporter or transferor “has ‘knowledge’ the transaction involves one of those prohibited end uses in or by Venezuela.” It will also be applicable if the exporter, re-exporter or transferor “has ‘knowledge’ the transaction involved one of those prohibited transactions or other activities in or by Venezuela,” the notice said.