On April 19, 2024, the Department of Commerce Bureau of Industry and Security (BIS) issued an interim final rule reducing export control licensing requirements for Australia and the United Kingdom (UK) as a means to further strengthen the AUKUS trilateral security partnership between the three countries. With this rule, Australia and the UK will have nearly the same liberal licensing treatment under the Export Administration Regulations (EAR) as Canada. For example, many Commerce-controlled items, including certain military, aerospace and satellite-related items, will now be eligible for export or reexport to Australia and the UK without a license.

This rule aligns with U.S. government policy in other areas of global trade and investment. For example, in 2020, the Committee on Foreign Investment in the United States (CFIUS) identified Australia, Canada and the United Kingdom as the initial “excepted foreign states” and “excepted real estate foreign states” due to certain aspects of their robust intelligence-sharing and defense industrial base integration mechanisms with the United States.

Separately, Canada, the UK and Australia are also all members of the National Technology and Industrial Base (NTIB), which, among other things, also carries benefits associated with foreign ownership, control, or influence (FOCI) mitigation in connection with facility security clearances.

The UK and Australia are two of the United States’ closest allies, with longstanding collective defense arrangements and similar export control and technology protection systems in place. AUKUS was established in September 2021 to support collective security and defense interests, deepen information and technology sharing, and foster integration of security- and defense-related science, technology, industrial bases, and supply chains. This emphasis on AUKUS appears to be part of a broader U.S. government effort to fortify international alliances and promote transatlantic cooperation in promoting and reinforcing export controls. This interim final rule follows several other efforts to enhance export control cooperation between the countries, including provisions related to streamlining defense trade in the National Defense Authorization Act (NDAA) Fiscal Year 2024.

An important implication of this rule is that in some cases, foreign companies that have received covered items under a BIS license may now not need a license to reexport the items to Australia and the UK.

Regulatory Changes
This rule makes six primary export control policy changes, as well as several minor conforming changes to further align the treatment of Australia, Canada and the UK under the EAR.

1 – 3: Removal of list-based license requirements for exports, reexports and transfers (in-country) to Australia and the UK. BIS anticipates these changes will reduce licensing burdens by over 1,800 total licenses valued at over $7.5 billion per year:

• • All Commerce Country Chart-based National Security (NS) and Regional Stability (RS) controls are removed for these countries. Missile technology column 1 (MT1) reasons for control are also removed.
  • The “600 series” items controlled under the EAR, which are generally items on the Wassenaar Arrangement Munitions List, will no longer require a license to Australia or the UK.
  • Items controlled under the EAR for missile technology reasons consistent with the MTCR Annex will also no longer require a license to Australia or the UK.
  • Except for those items requiring a license to all destinations worldwide pursuant to § 742.6(a)(9), many 9×515 satellite-related items will no longer require a license to Australia or the UK.

4. Removal of license requirements for military commodities described under ECCN 0A919 items to Australia and the UK

5. Removal of military end-use and end-user-based license requirements for certain cameras, systems or related components detailed under § 744.9(a)(1)(i) and (a)(1)(iii) of the EAR.

6. Removal of license requirements for Significant Items (SI) (i.e., hot section technology for the development, production or overhaul of commercial aircraft engines, components and systems) controlled under ECCN 9E003.a.1 through a.6, a.8, .h, .i, and .l, and related controls to or within Australia and the UK

Some of the minor policy changes arising from these major policy changes include:

• License exception Aircraft, Vessels, and Spacecraft (AVS) eligibility now applies to Australian and UK airlines, which means that Australian and UK airlines in most destinations may receive MT1 items as spare parts. BIS plans to include definitions for what constitutes an “Australian airline” and “United Kingdom (or UK) airline.”
• Note that firearms-related items and other CC controlled items in ECCNs 0A501 (except 0A501.y), 0A502, 0A503, 0A504, 0A505. a, .b, and .x, 0A981, 0A982, 0A983, 0D501, 0D505, 0E501, 0E502, 0E504, 0E505, and 0E982 will continue to require a license when destined to and among the UK and Australia.

BIS is accepting comments on the interim rule until June 3, 2024.

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