This blog post was drafted with assistance from Sean C. Church, Paralegal
On July 25, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced revisions to the Export Administration Regulations (EAR) through a proposed rule revising certain restrictions on military end uses and end users and a proposed rule covering foreign security-based restrictions. BIS is accepting comments on these proposed rules until September 27, 2024.
The new rules would expand the military end use/user controls to apply to all items subject to the EAR (including EAR99 items), rather than only the items specified in supplement no. 2 to part 744, as it is now. Further, the revised controls would expand the country scope for certain military end-use and end-user controls to apply to certain countries identified in Country Group D:5 and Macau, or wherever located when identified on the Entity List, a significant expansion of the existing controls.
The proposed rules would also impose end use and end user controls on certain items subject to the EAR involving military support, intelligence, and security, an expansion beyond the prior military end-use rules. The new controls also cover exports to private entities that provide military (e.g. mercenary) services, and private entities that supply substantive services to foreign intelligence and to foreign security entities. These are broad ranging revisions to the rules that may affect licensing requirements for many exports.
The proposed rules also implement additional restrictions on U.S. persons’ support for particular military, military support, and intelligence end uses and end users of concern. These controls address situations where U.S. persons are not exporting products for such end users or end uses, but are otherwise providing support, such as financing, freight forwarding, or support services.
Companies should consider whether their current activity might require a license under the proposed rules. If so, companies may want to submit comments during the comment period or otherwise prepare for the new restrictions. Please contact our sanctions, export controls, and CFIUS team if you need assistance navigating these latest developments.
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