Commerce to Eliminate EAR License Exemption for Civil End-Users

Commerce plans to eliminate license exceptions for civil end-users from the Export Administration Regulations, according to an alert from Akin Gump. Commerce did not say when the changes would take effect, the alert said, but U.S. companies should “prepare for the possibility that currently exempted activities may soon require specific licenses” from the Bureau of Industry and Security. The Office of Information and Regulatory Affairs recently completed a review of the changes, according to a notice on the OIRA website.

Akin Gump said the exception, called License Exception CIV, is not a “widely applicable exception” under the Commerce Control List but authorizes unlicensed exports for “a number” of items controlled for national security reasons to civil end-users in Country Group D:1. That group includes China.

Items under License Exception CIV include “bearings, semiconductors, semiconductor production equipment, materials for semiconductor production, computers, telecommunication equipment, acoustic systems, optical equipment and materials, radar equipment, marine systems, and civil aircraft engine production equipment,” the alert said. The notice was “likely in response” to a requirement in the Export Control Reform Act “that Commerce review the EAR’s licensing policies with respect to exports involving countries subject to arms embargoes, such as China,” Akin Gump said.

Although License Exception CIV is “still valid,” Akin Gump suggests businesses that “export items or release technology or software” prepare license applications that would “allow for operational continuity under new licenses.”