BIS amends EAR to implement Australia Group decisions

On June 17, 2020 the Department of Commerce, Bureau of Industry and Security (BIS)(1) published a final rule(2) that updates the Export Administration Regulations (EAR) to implement decisions made at the February 2020 Australia Group(3) meeting. The rule amends Export Control Classification Numbers (ECCNs) 1C350, 1C351 and 2B352 on the Commerce Control List (CCL) by:

  • Adding twenty-four (24) precursor chemicals, as well as mixtures in which at least one of these chemicals constitutes 30% or more of the weight of the mixture to ECCN 1C350.d;

  • Amending ECCN 1C351 by adding Middle East respiratory syndrome-related coronavirus (MERS-related coronavirus); and

  • Amending ECCN 2B352 by adding a technical note to indicate that cultivation chamber holding devices controlled in 2B352.b.2.b include single-use cultivation chambers with rigid walls.

The following twenty-four (24) precursor chemicals are now controlled under ECCN 1C350:

  • (C.A.S. #589–57–1) Diethyl chlorophosphite;

  • (C.A.S. #762–77–6) Ethyl chlorofluorophosphate;

  • (C.A.S. #1498–51–7) Ethyl dichlorophosphate;

  • (C.A.S. #460–52–6) Ethyl difluorophosphate;

  • (C.A.S. #754–01–8) Methyl chlorofluorophosphate;

  • (C.A.S. #677–24–7) Methyl dichlorophosphate;

  • (C.A.S. #22382–13–4) Methyl difluorophosphate;

  • (C.A.S. #14277–06–6) N,NDiethylacetamidine;

  • (C.A.S. #53510–30–8) N,NDiethylbutanamidine;

  • (C.A.S. #90324–67–7) N,NDiethylformamidine;

  • (C.A.S. #1342789–47–2) N,NDiethylisobutanamidine;

  • (C.A.S. #84764–73–8) N,NDiethylpropanamidine;

  • (C.A.S. #1315467–17–4) N,NDiisopropylbutanamidine;

  • (C.A.S. #857522–08–8) N,NDiisopropylformamidine;

  • (C.A.S. #2909–14–0) N,NDimethylacetamidine;

  • (C.A.S. #1340437–35–5) N,NDimethylbutanamidine;

  • (C.A.S. #44205–42–7) N,NDimethylformamidine;

  • (C.A.S. #321881–25–8) N,NDimethylisobutanamidine;

  • (C.A.S. #56776–14–8) N,NDimethylpropanamidine;

  • (C.A.S. #1339586–99–0) N,NDipropylacetamidine;

  • (C.A.S. #1342422–35–8) N,NDipropylbutanamidine;

  • (C.A.S. #48044–20–8) N,NDipropylformamidine;

  • (C.A.S. #1342700–45–1) N,NDipropylisobutanamidine; and

  • (C.A.S. #1341496–89–6) N,NDipropylpropanamidine.

Note: Mixtures in which at least one of the chemicals listed in ECCN 1C350.d constitutes 30% or more of the weight of the mixture are also controlled under this ECCN.

Contact the professionals at GCSG for more information on this development.

References

  1. Bureau of Industry and Security: “Home Page

  2. Federal Register: “85 FR 36483-36492” - June 17, 2020

  3. Australia Group: “Home Page

BIS amending EAR to expand license requirements for military end users and uses

The Department of Commerce, Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR)(1). The rule will:

  • Expand the licensing requirements for China to now include “military end users”, in addition to those intended for “military end use”.

  • Broaden the items for which the licensing requirements and review policy apply.

  • Expand the definition of “military end use”.

  • Create a new reason for control and associated review policy for regional stability for certain items to China, Russia, or Venezuela; and

  • Add Electronic Export Information filing requirements in the Automated Export System (AES) for exports to China, Russia, and Venezuela.

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BIS adds Hong Kong documentation requirements for exports/re-exports

On January, 19, 2017 the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule (82 FR 6216-6218) which will require, in certain cases, that documents be obtained prior to exporting to Hong Kong or re-exporting from Hong Kong (HK).  BIS issued this rule to provide more assurance that items subject to multilateral control regimes, that pass through HK, are appropriately authorized to their final destination. 

Export Administration Regulation (EAR) regulated items, controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear non-proliferation (NP column 1), or chemical and biological weapons (CB) will now be required to obtain, prior to export or re-export, a copy of a Hong Kong import license.  If a license is not required the exporter or re-exporter will be required to obtain a statement from the Hong Kong government that a license is not required.

This rule will be effective on April 19, 2017.

 

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BIS Harmonization of Destination Control Statements

On August 17, 2016 the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule (81 FR 54721-54732) that implements changes recommended in a May 22, 2015 proposed rule (80 FR 29551-29554).  The rule revises the destination control statement in Sect 758.6 of the Export Administration Regulations (EAR).  The rule harmonizes the EAR statement with the destination control statement required for the export of items subject to the International Traffic in Arms Regulations (ITAR). 

The revised destination control statement reads as follows:

"These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end user(s) herein identified.  They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations"

The rule is effective November 15, 2016.

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BIS Revises Guidance Regarding EAR Enforcement Cases

On Wednesday, June 22 the Department of Commerce, Bureau of Industry and Security (BIS) published (81 FR 40499-40511) updated guidance (found in Supplement No. 1 to part 766) regarding violations of the Export Administration Regulations (EAR). 

The guidance amends the EAR to make civil penalty decisions more transparent and aligns them with the Treasury Department's Office of Foreign Assets Control (OFAC). 

OFAC criminal penalties can reach 20 years imprisonment and $1 million per violation.  OFAC civil penalties use the transaction value as the starting point and can reach $250,000 or twice the value of the transaction, whichever is greater (Economic Sanctions Enforcement Guidelines). 

The updated guidance does not apply to alleged violations under part 760 of the EAR - Restrictive Trade Practices and Boycotts or to cases that are pending prior to July 22, 2016. 

The effective date of the final rule change is July 22, 2016. 

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