A final rule issued by the US Department of Commerce’s Bureau of Industry and Security (BIS) on April 28 broadens license requirements in Part 744 of the Export Administration Regulations (EAR) to include military end users in China. A license was previously only necessary to export items for military end use in China—not to military end users. The rule also broadens the definition of “military end use” and expands Electronic Export Information (EEI) filing requirements, among other things.
Of interest to the nuclear industry, the rule affects nuclear materials and equipment under a number of Export Control Classification Numbers (ECCNs), and becomes effective on June 29, 2020.
Section 744.21 of the EAR, which places restrictions on “military end use” and “military end users” in China, Russia, and Venezuela, now prohibits the export, reexport, or in-country transfer of the items in Supplement 2 without a license if there is “knowledge” that the item is intended for military end use or a military end user in those countries.
The items identified in Supplement 2 to Part 744 as subject to the licensing requirements in Part 744 now include the following:
- Depleted uranium (ECCN 1A290)
- Generators and other equipment “specially designed,” prepared, or intended for use with nuclear plants (ECCN 2A290)
- Equipment related to nuclear material handling and processing and to nuclear reactors, plus “parts,” “components,” and “accessories” (ECCN 2A291)
- Software “specially designed” or modified for the “development,” “production,” or “use” of items controlled by ECCNs 2A290 or 2A291 (ECCN 2D290)
The rule also broadens the definition of “military end use” by identifying each element of the definition of “use,” such that any item that contributes to or supports the “operation, installation, maintenance, repair, overhaul, or refurbishing” of military items is covered.
Finally, the rule expands EEI filing requirements in the Automated Export System (AES) for exports to China, Russia, or Venezuela by requiring filing regardless of the value of the shipment, unless the shipment is eligible for “License Exception GOV.”
BIS’s intent in publishing this rule is “to support the national security and foreign policy objectives of the United States by broadening the United States government’s visibility into and ability to deny or condition exports, reexports, and transfers (in-country) involving certain items on the Commerce Control List (CCL) . . . that are destined to military end users or end uses in China, Russia, or Venezuela.”
This rule adopts a license review policy of presumption of denial in Section 744.21(e).