BIS Issues Regulations for MEU List

The Bureau of Industry and Security will amend the Export Administration Regulations (EAR) Dec. 23 to add the new military end-user list (see 2012210047), consisting of 103 entities subject to export licensing requirements, the agency said in a Dec. 22 notice. Licenses will be required to export, reexport or transfer certain items described in the EAR that are subject to military end-use (MEU) or end-user licensing requirements. A BIS spokesperson said the 102 cited in the notice is a typo.

BIS said the list -- which will be composed of Chinese, Russian and Venezuelan companies -- is an “effective way” for the agency to inform industry that the entities pose an “unacceptable risk” of diversion. It stressed that the list is not complete. Companies should continue to make sure they are complying with BIS’s April rule that increased license requirements for exports to certain military end-users and for certain end uses (see 2004270027) because the agency said it “cannot list every ‘military end user’ or party representing a risk of diversion thereto in the MEU List.”

BIS created the list to address compliance questions from industry, which struggled with the April rule's broad scope and unclear due diligence requirements (see 2007090075). BIS said it received “numerous” requests from the public and its technical advisory committees, including more than 80 advisory opinions and “emailed requests for guidance,” to publish an MEU list. Since the rule was released, companies have filed “several hundred” license applications.

BIS called a public MEU list the “most practical and effective approach” to providing guidance to industry, because individual responses, licensing determinations and email requests are all “private and confidential” to the requester. “Identifying ‘military end users’ on the MEU List, where possible, will ease the public’s compliance burden,” the agency said, “and make for a more effective ‘military end use’ and ‘end user’ control.”

BIS also said it expanded the role of the interagency End-User Review Committee -- which is staffed by the Commerce, Defense, Energy, State and Treasury departments -- to make decisions over whether entities should be added or removed from the MEU list. Entities can submit requests to the ERC to be removed from the list and “petition” why it is not a military end-user or involved in military end-uses.

Only one license exception will be available for exports to entities on the list for shipments of controlled items: License Exception GOV (Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station). Licenses will also be required when an entity on the list is a “party to the transaction,” the agency clarified, adding that the first tranche of 103 entities is subject to a licensing review policy of presumption of denial. BIS also clarified that the MEU list applies only to goods subject to the EAR and not items controlled by the International Traffic in Arms Regulations or other controls.

All exports and reexports that now require a license as a result of the additions to the MEU List that were aboard a carrier to a port as of Dec. 23 may proceed to their destinations under the previous eligibility, BIS said.

China’s Foreign Ministry criticized the addition of Chinese companies to the MEU List, saying Dec. 22 it “firmly opposes” the measures. “We once again urge the U.S. to stop unilateralism and bullying, give fair treatment to companies from all countries, including Chinese companies, and maintain a normal international economic and trade order,” a ministry spokesperson said, according to an unofficial translation.