On December 6, 2023, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) unveiled three pivotal rules that amend the Export Administration Regulations (“EAR”). These rules mark a crucial step in a comprehensive BIS initiative aimed at simplifying various export categories, removing specific export controls, and widening the availability of export license exceptions for U.S. allies and partner countries, along with a number of specific multilateral export control regimes.
The first rule amends the EAR by eliminating licensing requirements to export specific U.S. goods and technology to Australia Group member countries, including controlled pathogens, toxins and related technologies, unless the item is also subject to controls for Proliferation of Chemical Weapons (CW). The BIS revised the EAR acknowledging that each Australia Group member possess a robust export control system capable of regulating dual-use exports in line with U.S. national security, foreign policy, and non-proliferation objectives. The list of members of the Australia Group can be found here. All countries participating in the Australia Group are parties to the Chemical Weapon Convention (CWC) and the Biological Weapon Convention (BWC).
The rule also revises the Commerce Country Chart to remove Crime Control and Detection (CC) licensing obligations on certain items that are destined for Austria, Finland, Ireland, Liechtenstein, South Korea, Sweden, and Switzerland, all party to the Global Export Controls Coalition (“GECC”). This rule modifies the Commerce Country Chart by eliminating for these seven countries control for “CC” reasons under Column 1 and Column 3. Each controlled item on the Commerce Control List (“CCL”) lists reasons for control within the applicable Export Control Classification Number (“ECCN”). Once an ECCN is identified, the exporter must cross reference the reasons for control against the CCL. In this regard, the requirements to obtain a BIS export license for reasons for control in CC Columns 1 and 3 have been removed. This change demonstrates BIS’ acknowledgment that these countries (i) have instituted export controls on Russia and Belarus that closely mirror U.S. export controls and (ii) demonstrate strong records in safeguarding civil liberties, individual freedoms and upholding democratic norms. The GECC includes Iceland, Liechtenstein, Norway, Switzerland, Australia, Canada, the 27 member states of the European Union, Japan, the Republic of Korea, Taiwan, New Zealand, the United Kingdom, and the United States.
The second rule expands the availability of license exceptions to additional countries for certain Missile Technology (MT) controlled items. Specifically, the changes to the EAR for license exception eligible for MT-controlled items consist of the following: (i) expand the general license exemption for MT-controlled items identified in § 740.2(a)(5); and (ii) revise the terms and conditions of four license exceptions. Additionally, the rule revises six ECCNs under the EAR (i.e., 1C111, 2A101, 2B119, 6A107, 9A101, and 9E515) to reflect recent changes to the Missile Technology Control Regime (“MTCR”).
Revising General License Exemption for Certain MT-controlled ECCNs:
Revising Four License Exceptions:
The third and final rule proposes to amend License Exception Strategic Trade Authorization (STA) within the EAR. BIS is soliciting public comments to gain insights into any impediments to use of License Exception STA. The proposed revisions intend to make the following changes to License Exception STA:
This amendment is intended to reflect the close cooperation among the U.S. and its partners on export controls while ensuring continued protection of U.S. national security and foreign policy interests for items authorized under License Exception STA.
This paper is intended as a guide only and is not a substitute for specific legal or tax advice. Please reach out to the authors for any specific questions. We expect to continue to monitor the topics addressed in this paper and provide future client updates when useful.
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