BIS Expands Russia, Belarus Export Controls

The Bureau of Industry and Security this week announced a host of measures to expand its export restrictions against Russia and Belarus, including an expansion of its Russian industry sector sanctions to add new export controls on lower-level items. The agency also expanded its military and military intelligence end-user controls, applied its Russian-Belarusian MEU foreign direct product rule to additional entities, added additional dollar value exclusion thresholds for certain luxury goods exports and more.

The changes, which took effect Sept. 15, show that BIS will “continue working with our international partners to tighten our collective restrictions as necessary to maximize our impact and demonstrate to Russia and its enablers that we will not hesitate to act to further isolate them,” BIS Undersecretary Alan Estevez said in a statement. “Russia is struggling to repair, replace, and replenish its arms stockpiles, and today’s action will continue to degrade their ability to sustain military aggression against Ukraine.”

One change will expand the scope of the Export Administration Regulations’ Russian industry sector sanctions to include additional items that may contribute to Russia’s chemical and biological weapons production and advanced manufacturing capabilities, BIS said. The restrictions will now also apply to a “subset” of items designated as EAR99 -- items that usually don’t require an export license -- such as “discrete chemicals, biologics, fentanyl and its precursors.” The agency expects the changes to result in an additional 175 license applications annually.

BIS also expanded the scope of its Russia industry sector sanctions by adding 57 items that will require an export license for Russia and Belarus, including a variety of industrial machinery and equipment such as “Rider-Type, Counterbalanced, Self-Propelled Fork-Lift Trucks” and electric storage heating radiators. The agency also specified that certain parts, components and accessories of the items will also be subject to the restrictions, which BIS said will improve the “effectiveness” of its export controls. BIS said it expects the changes to result in an additional 90 license applications annually.

The agency also imposed controls on quantum computing-related hardware, software and technology, a move announced in conjunction with the Treasury Department’s new prohibition on quantum computing services to Russia (see 2209150040). The controls apply to quantum computers and “specially designed” electronic assemblies, quantum processing units, qubit circuits, qubit devices and more.

Other changes expand the scope of the agency’s is-informed provisions, add Belarus to the agency’s Russian industry sector sanctions and expand MEU and MIEU rules to “more effectively target Russia and Belarus.” BIS also designated additional Russian military end-users and applied the Russian/Belarusian-MEU foreign direct product rule to certain entities located outside of Russia and Belarus that were either previously sanctioned or added to the Entity List for supplying blacklisted Russian entities. The move applies to six entities: Connec Electronic; King-Pai Technology; Sinno Electronics; Winninc Electronic; World Jetta (H.K.) Logistics Limited; and Promcomplektlogistic Private Company.

Additional changes expand MEU controls to Belarusian, Burmese, Cambodian, Chinese, Russian and Venezuelan military end users “located anywhere in the world.” The agency said it’s aware of the “compliance concerns” voiced by exporters surrounding the MEU lists and said this change will “facilitate compliance by relieving exporters, reexporters, and transferors from having to independently assess the potential applicability of § 744.21 on a worldwide basis, which would be a significant compliance burden.” The agency also expanded similar controls for military intelligence end-users.

The agency’s increased restrictions on shipments to military end-users, announced in 2020, caused confusion and uncertainty for some companies that were unsure how much due-diligence was sufficient in assessing whether a customer could be considered a military end-user (see 2006150031, 2007090075 and 2105050048).

BIS also tightened its luxury goods export controls by reducing the “dollar value threshold for clothing and shoes from $1,000 to $300 Per Unit Wholesale Price.” Other items, such as cars, have a higher exclusion threshold. The agency made the change because its exclusions were “more permissive than those adopted by our allies.”

Other revisions include a number of corrections and clarifications to existing export controls and EAR recordkeeping requirements, including one update to “more accurately describe the types of commodities and software” included under License Exception CCD (Consumer Communications Devices). BIS also clarified that it will review certain license applications involving luxury goods case by case if they are needed to “meet humanitarian needs,” such as contact lens solution and rewetting drops “necessary to maintain eye health.”

All exports that now require a license as a result of these changes and were aboard a carrier to a port as of Sept. 15 may proceed to their destinations under the previous eligibility as long as the export is completed no later than Nov. 14, BIS said.