Commerce Expands Licensing Requirements for Certain Exports to China, Russia, Venezuela
The Commerce Department amended the Export Administration Regulations to expand licensing requirements for exports, re-exports and transfers of items intended for military uses in China, Russia and Venezuela, according to a notice. The rule expands the licensing requirements for exports to China to include military end-users as well as military end-uses, broadens the list of items subject to the licensing requirement and review policy, and expands the definition for military end-use. The rule also “creates a new reason for control” and review policy for certain exports to the three countries, and added new Electronic Export Information filing requirements.
The changes take effect June 29. All shipments now requiring a license as a result of this rule that were on dock for loading or aboard a carrier to a port as of that date may proceed to their destinations under the previous eligibility as long as they are exported, re-exported or transferred by July 27, Commerce said.
The rule broadens the definition for military end-use to include “any item that supports or contributes to the operation, installation, maintenance, repair, overhaul” or “refurbishing … of military items,” Commerce said. The term was previously defined as items intended for the “use,” “development,” or “production” of military items.
The rule also expands license requirements to cover military end-users in China, which will require “increased diligence” by industry to evaluate Chinese end-users, Commerce said, “particularly in view of China’s widespread civil-military integration. Commerce added a series of new Export Control Classification Numbers to be covered under this license requirement, including items in the categories of “materials processing, electronics, telecommunications, information security, sensors and lasers and propulsion.”
Commerce will adopt a license review policy of presumption of denial, the agency said, which is “consistent” with its review policy for certain exports of “microprocessors and associated software and technologies for military end uses and end users.” To help “the public comply” with these export controls, the rule will relocate the existing license requirement “for items described in [any] paragraph of a 9x515 or ‘600 series’ ECCN to China, Russia, or Venezuela … to the License Requirements sections of the relevant ECCNs on the [Commerce Control List].”
Lastly, the rule expands EEI filing requirements in the Automated Export System for exports to China, Russia and Venezuela to cover filings for exports “regardless of the value of the shipment,” Commerce said. Previously, exporters were exempt from filing EEI for these items if they were valued under $2,500 and did not require an export license. Even if a license is not required, the EEI filing must now “include the correct ECCN regardless of reason for control,” the agency said. This change will “promote transparency with respect to shipments to these destinations,” Commerce said.
(Federal Register 04/28/20)