Effective January 25, 2024, the Department of Commerce’s Bureau of Industry and Security (BIS) again expanded export controls and sanctions against Russia for its continuing aggression against Ukraine and Belarus for its complicity in such activities. In a Final Rule, BIS is expanding the scope of the Export Administration Regulations’ (EAR) Russian and Belarusian Industry Sector Sanctions and making certain changes to the licensing requirements that apply to the occupied Crimea region of Ukraine. Additionally, the rule revises recent restrictions targeting Iran’s supply of Unmanned Aerial Vehicles to Russia.
- Expansion of Russia and Belarus Industry Sector Sanctions – The Final Rule adds 95 six-digit Harmonized Tariff Schedule of the United States (HTSUS) codes to the list of items requiring a license for export, reexport, or transfer (in-country) to Russia or Belarus. This expanded list includes certain acids, chemicals, oil and petroleum products, lubricants, metals and metallic minerals, and covers the entirety of Chapter 88 of the HTSUS (aircraft, spacecraft, and parts thereof), thus further restricting Russia’s access to inputs for its defense industrial base. These additions have been added to Supplement No. 4 to part 746 of the EAR and are intended to align with controls imposed by U.S. allies.
- Expansion of Controls on Items Destined to Iran – The rule also expands controls on certain antennas, antenna reflectors, and parts thereof under six-digit HTSUS 852910 to further restrict such items, which are often used to build unmanned aerial vehicles (UAVs), from going to Iran and Russia when produced abroad with U.S. technology or software. This addition has been added to Supplement No. 7 to part 746 of the EAR and is intended to undermine Iran’s ability to support Russia.
- Prohibiting the Use of De Minimis U.S. Content for Certain Foreign-Made Items – The Final Rule also removes the lowest-level military and spacecraft-related items from being eligible for de minimis treatment when incorporated into foreign-made items for export from abroad or reexport to Russia or Belarus. Specifically, with implementation of this Final Rule there is no de minimis level for U.S.-origin 9×515 or “600 series” .y items destined for Belarus or Russia. BIS notes that adding Belarus and Russia to this restriction on the use of de minimis “will bring additional foreign-made military and spacecraft items within the scope of the EAR and put additional pressure on Russia’s military and defense industrial base, as well as make it more difficult for foreign suppliers to provide even low-level military and spacecraft items to Belarus and Russia.”
- Exclusion from Certain License Requirements Related to Deployments by the Armed Forces of Ukraine – Finally, the rule makes several clarifying changes, including by adding under the current special controls on “temporarily occupied Crimea region of Ukraine” (15 C.F.R. § 746.6) an exclusion from BIS license requirements in situations involving exports, reexports, and transfers (in-country) that are related to deployments made by the Armed Forces of Ukraine to or within the temporarily occupied Crimea region of Ukraine and covered regions of Ukraine.
In announcing these additional export restrictions, BIS noted that the action was undertaken in part “to better align U.S. controls with the stringent measures implemented by partners and allies,” and to “enhance the effectiveness of the multilateral sanctions on Russia by further limiting Russia’s access to items that enable its military capabilities and to sources of revenue that could support those capabilities.”
For related details on Russia and Belarus Industry Sector Sanctions and controls on items destined to Iran, see Thompson Hine Update of May 22, 2023.
This Final Rule is effective as of January 25, 2024. However, for the changes being implemented by the rule, shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action and that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on January 23, 2024, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR), provided the export, reexport, or transfer (in-country) is completed no later than on February 22, 2024.