Every month we post the highlights of FCC’s Export/Import Daily Update (“The Daily Bugle”). The Daily Bugle is sent out every business day to approximately 10,000 readers, who keep up to date with changes in defense and high-tech trade laws and regulations. It is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III and Elina Tsapouri.
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Last month’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC: “Ukraine-/Russia-Related Sanctions”; Monday, 2 May 2022; Item #1
- EU Commission Amends Regulation EU-2021/821 by Removing Russia as a Destination from the Scope of Union General Export Authorisations; Wednesday, 4 May 2022; Item #5
- Commerce/BIS Extends Time for Comments on Expanding Russian Sanctions; Tuesday, 10 May 2022; Item #1
- Commerce/BIS Expands EAR Sanctions Against Russian Industry Sectors; Wednesday, 11 May 2022; Item #1
- UK Export Control: “Guidance on End-Use Controls Applying to Military Related Items”; Friday, 20 May 2022; Item #6
- Commerce/BIS Proposes Controls on Exports of Four Marine Toxins for Public Comment; Monday, 23 May 2022; Item #1
- Commerce/BIS Adds New License Exception “Authorized Cybersecurity Exports” (ACE); Thursday, 26 May 2022; Item #1
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Treasury/OFAC: “Ukraine-/Russia-Related Sanctions”
(Source: Today’s Federal Register, 87 FR 26094, 2 May 2022) [Excerpts]
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is changing the heading of the Ukraine Related Sanctions Regulations to the Ukraine-/Russia-Related Sanctions Regulations, and replacing the Ukraine Related Sanctions Regulations that were published in abbreviated form on May 8, 2014, with a more comprehensive set of regulations that includes additional interpretive and definitional guidance, general licenses, and other regulatory provisions that will provide further guidance to the public. … In addition, this amendment incorporates four directives regarding sectoral sanctions issued pursuant to the Ukraine-/Russia-related Executive order of March 20, 2014, and six general licenses that have until now appeared only on OFAC’s website, as well as seven new general licenses.
* DATES: This rule is effective May 2, 2022.
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EU Commission Amends Regulation EU-2021/821 by Removing Russia as a Destination from the Scope of Union General Export Authorisations
(Source: Official Journal of the European Union, 4 May 2022) [Excerpts]
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021 setting up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (1), and in particular Article 17(2) thereof,
Whereas:
(1) In light of Russia’s illegal attack on Ukraine’s territorial integrity, sovereignty, and independence and the respective threats to the Union’s essential security interests, the Union decided to impose further restrictions on exports of dual-use goods and technology and on the provision of related services. Council Regulation (EU) 2022/328 (2) imposes, amongst others, restrictions on exports of dual-use goods and technology and on the provision of related services. Council Regulation (EU) 2022/394 (3) further imposes export restrictions on navigation goods and technologies. Council Regulation (EU) 2022/428 (4)imposes export restrictions on equipment, technology and services for Russia’s energy industry (excluding nuclear industry and the downstream sector of energy transport). Council Regulation (EU) 2022/576 (5) imposes additional export restrictions on a range of advanced technologies.
(2) Regulation (EU) 2021/821 introduces eight Union general export authorisations for exports of certain items to certain destinations under specific conditions and requirements. Currently, three Union general export authorisations can be used for exports to Russia: EU003 (re-export of items after repair or replacement in the EU), EU004 (export of items for fairs or exhibitions), EU005 (exports of telecommunications equipment).
(3) In view of the Union’s actions against Russia, it is appropriate to remove Russia from the destination lists of Union general export authorisations Nos EU003, EU004 and EU005 in order to prevent Russia from gaining access to critical technologies and dual-use items.
(4) Regulation (EU) 2021/821 should therefore be amended accordingly.
(5) In view of the direct threat to European peace and security posed by the conflict, there exist imperative grounds of urgency for removing Russia from the scope of Union general export authorisations Nos EU003, EU004, and EU005. For that reason, the urgency procedure provided for in Article 19(1) of Regulation (EU) 2021/821 should apply and this delegated act should enter into force on the day following that of its publication in the Official Journal of the European Union,
HAS ADOPTED THIS REGULATION:
Article 1
Annex II to Regulation (EU) 2021/821 is amended in accordance with the Annex to this Regulation.
Article 2
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 3 May 2022.
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Commerce/BIS Extends Time for Comments on Expanding Russian Sanctions
(Source: 87 FR 27987, 10 May 2022) [Excerpts]
* AGENCY: Commerce/Bureau of Industry and Security
* ACTION: Extension of comment period.
* SUMMARY: On April 6, 2022, the Bureau of Industry and Security (BIS) published the notice Request for Public Comments on Supply Chain Issues To Support the U.S.-EU Trade and Technology Council Secure Supply Chains Working Group. Today’s notice extends the deadline for written comments to June 23, 2022. This extension is being made to allow for commenters to take into account any developments or announcements that may occur as a result of the United States-EU TTC second leaders’ meeting scheduled for May 15-16, 2022 in France.
* DATES: The comment period for the notice published April 6, 2022 at 87 FR 19854, is extended until June 23, 2022.
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Commerce/BIS Expands EAR Sanctions Against Russian Industry Sectors
(Source: Today’s Federal Register, 87 FR 28758, 11 May 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Department of Commerce.
* ACTION: Final rule.
* SUMMARY: In response to the Russian Federation’s (Russia’s) ongoing aggression against Ukraine, the Department of Commerce is expanding the existing sanctions against Russian industry sectors by imposing a license requirement for exports, reexports, or transfers (in-country) to and within Russia for additional items subject to the Export Administration Regulations (EAR) identified under specific Schedule B numbers or Harmonized Tariff Schedule codes. The Bureau of Industry and Security (BIS) is taking these actions to further restrict Russia’s ability to withstand the economic impact of the multilateral sanctions, further limit sources of revenue that could support Russia’s military capabilities, and to better align with the European Union’s controls.
* DATES: This rule is effective on May 9, 2022.
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UK Export Control: “Guidance on End-Use Controls Applying to Military Related Items”
(Source: Export Control Joint Unit and Department for International Trade, 19 May 2022)
When military end-use export controls apply and to which destinations.
Contents
Military end-use controls are a form of catch-all control.
The purpose of catch-all controls is to allow export controls to be imposed, on a case-by-case basis, to items which are not specified in the UK Strategic Export Control Lists. In practice, this means that even if the items which you intend to export do not usually require an export licence, you might still require one.
(2) When military end-use controls apply
Military end-use controls can be applied in the following circumstances:
(1) Where the exporter has been informed in writing by Export Control Joint Unit (ECJU), or is aware, that otherwise non-controlled items (goods, software and technology) are or may be intended:
- for incorporation into military items listed in Schedule 2 to the Export Control Order 2008, as amended
- for use in production, test or analytical equipment and components for the development, production or maintenance of military items listed in Schedule 2
- for use in any unfinished products in a plant for the production of military items listed in Schedule 2
(2) Where the exporter has been informed, or is aware, that otherwise non-controlled items (goods, software and technology) are or may be intended for use as parts or components of military items listed in Schedule 2 to the Export Control Order 2008. This is when they were exported without authorisation or in violation of an authorisation granted by the Secretary of State.
(3) Where the exporter has been informed that otherwise non-controlled items (goods, software and technology) are or may be intended:
- for use by military forces, para-military forces, police forces, security services or government intelligence organisations
- for an entity involved in the procurement, research, development, production or use of items on behalf of the entities above
It does not apply to:
- the export of medical goods, including medicines and medical devices for the benefit of the civilian population of a country
- the export of consumer goods generally available to the public
- the transfer of software or technology generally available to the public
This control will only be invoked where it is assessed that the export would be capable of having a ‘relevant consequence’.
This is as set out in the Schedule to the Export Control Act 2002, and described as:
- a threat to the UK’s national security
- having an adverse effect on peace, security or stability
- an act threatening international peace and security
- an act contravening the international law of armed conflict
- an act of internal repression
- an act that breaches human rights
- an act of carrying out (or of acts which facilitate) acts of terrorism or serious crime
(3) What you must do when you are ‘informed’ of a licence requirement
(4) What you must do when you are ‘aware’ of a licence requirement
(5) Destinations to which the control applies
Military end-use controls can only be applied to exports to destinations which are:
- subject to an arms embargo imposed by the United Nations or the Organisation for Security and Cooperation in Europe (OSCE)
- listed as an ‘embargoed destination’ in Parts 1 and 2 of Schedule 4 to the Export Control Order 2008
As of 19 May 2022, the list of countries that the military end-use controls can apply to are:
- Armenia
- Azerbaijan
- Belarus
- Burma (Myanmar)
- Central African Republic
- China (including Hong Kong and Macao)
- Democratic Republic of the Congo
- Democratic People’s Republic of Korea
- Iran
- Iraq
- Lebanon
- Libya
- Russia
- Somalia
- South Sudan
- Sudan
- Venezuela
- Zimbabwe
(6) Contact ECJU
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Commerce/BIS Proposes Controls on Exports of Four Marine Toxins for Public Comment
(Source: Today’s Federal Register, 87 FR 31195, 23 May 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Proposed rule; request for comments.
* SUMMARY: The Bureau of Industry and Security (BIS), Department of Commerce, maintains controls on the export, reexport and transfer (in-country) of dual-use items and less sensitive military items through the Export Administration Regulations (EAR), including the Commerce Control List (CCL). This rule proposes new unilateral export controls on four naturally occurring, dual-use biological toxins (specifically, the marine toxins brevetoxin, gonyautoxin, nodularin and palytoxin), the synthesis and collection of which BIS has identified for evaluation according to the criteria in Section 1758 of the Export Control Reform Act of 2018 (ECRA) pertaining to emerging and foundational technologies. These toxins have the potential (through either accidental or deliberate release) to cause casualties in humans or animals, degrade equipment, or damage crops or the environment. As these toxins are now capable of being more easily isolated and purified due to novel synthesis methods and equipment, the absence of export controls on such toxins could be exploited for biological weapons purposes. To address this concern, BIS proposes to amend the CCL by adding these toxins to Export Control Classification Number (ECCN) 1C351. This rule also proposes several conforming changes to the EAR to reflect the proposed addition of these marine toxins to ECCN 1C351. In addition, this document requests public comments to ensure that the scope of these proposed controls will be effective and appropriate (with respect to their potential impact on legitimate commercial or scientific applications).
* DATES: Comments must be received by BIS no later than June 22, 2022.
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Commerce/BIS Adds New License Exception “Authorized Cybersecurity Exports” (ACE)
(Source: 87 FR 31948, 26 May 2022) [Excerpts]
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY: BIS is finalizing changes to License Exception ACE and corresponding changes in the definition section of the Export Administration Regulations (EAR) in response to public comments to an October 21, 2021 interim rule. That rule established a new control on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, as well as adding a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in certain circumstances. These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it. This rule also corrects Export Control Classification Number (ECCN) 5D001 in the Commerce Control List.
* DATES: This rule is effective May 26, 2022.