BIS Expands and Clarifies Restrictions on Russia and Belarus

Today the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule imposing additional sanctions and clarifying existing controls on Russia and Belarus under the Export Administration Regulations (EAR). These new measures enhance the effectiveness of U.S. controls and better align them with those implemented by U.S. allies and partners. A brief overview of this final rule is provided below.

Imposition of additional restrictions on Russia and Belarus

The final rule:

• Expands the list of items set forth in supplement no. 4 to part 746 (Russian and Belarusian Industry Sector Sanctions Pursuant to § 746.5(a)(1)(ii)) by adding 94 additional Harmonized Tariff Schedule (HTS)-6 Code entries. Notably, this addition includes all of harmonized system chapter 88, which is focused on aircraft, spacecraft, and parts thereof;
• Adds an entry (HTS-6 Code 852910, Antennas and antenna reflectors and parts thereof) to the list of items that require a license under § 746.7 when destined to Iran and under § 746.8 when destined to Russia or Belarus under supplement no. 7 to part 746, bringing U.S. controls into closer alignment with those of its partners and allies; and
• Prohibits the use of de minimis for “600 series” .y and 9×515 items destined for Russia or Belarus, bringing additional foreign-made military and spacecraft items within the scope of the EAR and putting additional pressure on Russia’s military and defense industrial base.

Corrections and clarifications to existing controls on Russia and Belarus

The measure also:

• Adds an exclusion from license requirements under § 746.6 for exports, reexports, and transfers (in-country) to or within the temporarily occupied Crimea region of Ukraine and covered regions of Ukraine related to deployments by the Armed Forces of Ukraine;
• Clarifies that the de minimis exclusions found in §§ 746.5(a)(3) and 746.8(a)(5) apply to “luxury goods” items identified in supplement no. 5 to part 746;
• Clarifies how exporters should treat items that are controlled to Russia or Belarus by more than one section of the EAR, indicating which EAR section takes precedence when determining licensing requirements that apply to items identified in supplements no. 4, 5, or 6 to part 746 that are also classified in an ECCN under §§ 746.5, 746.8, and 746.10;
• Clarifies that fasteners are excluded from the scope of supplement nos. 2, 4, 5, and 7, but are subject to the license requirements under § 744.21 for Russia and Belarus, as well as any other part 744 license requirement that applies to all items subject to the EAR;
• Harmonizes the license exceptions available under §§ 746.5, 746.8, and 746.10; the final rule includes a table that indicates the availability of license exceptions under each of these sections;
• Clarifies that “medicines” (meaning a “drug” as defined in section 201 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321) and including EAR99 prescription and over-the-counter medicines for humans and animals) are excluded from the scope of supplement no. 6 to part 746;
• Makes a conforming change to §§ 746.5(b)(2) and 746.10(b) to adopt a case-by-case license review policy for license applications related to the safety of flight to be consistent with the licensing policy in § 746.8; and
• Clarifies that the import restrictions on the temporary import of firearms from Ukraine do not apply to firearms that were previously exported, reexported, or transferred (in-country) under a BIS license that are being temporarily returned to the United States for repair and servicing.

Contact us if you have questions about these new controls and clarifications, or their potential impact on your business.