In a rule change that was effective April 8, 2022, but communicated on April 11, 2022 the Commerce Department’s Bureau of Industry and Security (BIS) expanded coverage of export controls on Russia and Belarus to include any item with an Export Control Classification Number (ECCN). Prior controls applied to items in Commerce Control List (CCL) Categories 3–9, but this rule expands export controls to cover Categories 0 (miscellaneous), 1 (materials), and 2 (materials processing) as well. The expansion comes with corresponding revisions to BIS’s Russia- and Belarus-related foreign direct product rule (Russia/Belarus FDP rule).
Under the final rule, U.S. persons are broadly prohibited from exporting, reexporting, or transferring to Russia or Belarus not only U.S. goods, software, and technology listed on Categories 0 through 9 of the CCL, but also foreign-produced items that are derived from the same. Newly controlled items include the following:
- Certain composite materials;
- Certain medical and biological products;
- Pumps, valves, machine tools; and
- All other controlled items, including materials and materials processing equipment, software, and technology.
This action marks a substantial expansion of BIS’s regulatory reach. First, all items with an ECCN, i.e., those that are not designated as EAR99, are now subject to BIS’s Russia- and Belarus- related export controls.
Second, items made entirely outside the United States that are produced using U.S.-origin software or technology included in an ECCN, or made using a variety of commodities covered by ECCNs, require U.S. export licenses to be shipped from foreign destinations to Russia or Belarus under the expanded Russia/Belarus FDP rule. As a result, non-U.S. sales involving the shipment of goods made outside the United States to Russia or Belarus may be subject to restrictions where U.S. know-how or products were involved in the non-U.S. manufacturing process. The Russia/Belarus FDP rules are complex and far reaching–we have not described them in full here.
Third, the final rule expanded existing limitations on the availability of License Exception AVS to include aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus, as opposed to only Russian aircraft.
All covered transactions will be subject to U.S. export license requirements. With limited exception, BIS will review license applications involving items covered by the rules described above under a policy of denial.
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