On April 28, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) published two new final rules and a proposed rule in the Federal Register amending the Export Administration Regulations (EAR) to tighten restrictions on exports of technology to China, Russia, and Venezuela. According to Commerce Secretary Wilbur Ross, these actions are intended to combat efforts by entities in China, Russia, and Venezuela to use certain US technologies obtained through civilian supply chains or under civilian-use pretenses to develop weapons, military aircraft, and surveillance technology contrary to US national security interests.
As a result of these rules, a universe of transactions involving widely commercially available US technologies that require BIS licenses could dramatically increase, particularly for China — with the licensing policy of the presumption of denial making such licenses difficult to obtain. These rules are part of a broader wave of recent regulatory measures aimed to strengthen the US Government’s restrictions on, as well as visibility into, technology transfers to China and other countries of concern to protect US national security and foreign policy interests.
As described further below, the rules:
- amend the EAR to expand license requirements on exports, reexports, and transfers (in-country) of items intended for military end-use or military end-users in China, Russia, or Venezuela;
- propose to modify License Exception Additional Permissive Reexports (“APR”) to remove provisions authorizing certain reexports of national security-controlled items; and
- remove License Exception Civil End Users (“CIV”) for national security-controlled items on the Commerce Control List (“CCL”) to countries of national security concern.