On April 30, 2024, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule (IFR) updating the Export Administration Regulations (EAR) to enhance the control structure for firearms and related items under BIS’s jurisdiction. This IFR will be effective on May 30, 2024, and public comment will be accepted until July 1, 2024.
Background
In 2020, jurisdiction over the control of certain firearms and related items was transferred from the U.S. Department of State’s United States Munitions List (USML) to BIS. See Thompson Hine Update of July 10, 2020. On October 27, 2023, BIS announced an immediate pause on the issuance of new export licenses for certain firearms, related components and ammunition in order to conduct a review to reassess current firearm export control policies with a focus on U.S. national security and foreign policy interests. See Thompson Hine Update of November 1, 2023. The purpose of this review was to mitigate the risk of these firearms being misused in ways that could destabilize regions, violate human rights or fuel criminal activities. During this pause, BIS requested an assessment from the State Department as to whether there are specific destinations in which there is substantial risk of diversion or misuse adverse to U.S. national security and foreign policy interests. On April 8, 2024, the State Department provided BIS with such foreign policy guidance.
This guidance focused on the risks associated with firearm exports to commercial distributors, civilians, and other non‐governmental end users. The State Department identified a set of risk factors, including such concerns as diversion risks, terrorism risks, corruption risks, human rights and political violence risks, state fragility risks, organized crime/gang risks, and drug trafficking risks. The State Department determined there are currently 36 countries where there is a substantial risk that lawful firearms exports to non‐governmental end users will be diverted or misused in a manner adverse to U.S. national security and foreign policy. These countries are: Bahamas, Bangladesh, Belize, Bolivia, Burkina Faso, Burundi, Chad, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Indonesia, Jamaica, Kazakhstan, Kyrgyzstan, Laos, Malaysia, Mali, Mozambique, Nepal, Niger, Nigeria, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Suriname, Tajikistan, Trinidad and Tobago, Uganda, Vietnam, and Yemen.
Interim Final Rule
In this IFR, BIS has revised the license requirements and review policies, as well as other aspects of the control structure (e.g., license exceptions eligibility and export clearance requirements) for firearms, shotguns and related items (e.g., discharge type arms, optical devices, ammunition, and related technology and software) controlled under certain Export Control Classification Numbers (ECCNs). Further, the IFR adds new ECCNs to the Commerce Control List controlling certain semi-automatic firearm products and parts. The IFR also makes revisions to BIS’ license review policies under the Regional Stability (RS) and Crime Control (CC) “reasons for control” under the EAR that will require that applications for exports for certain ECCNs be reviewed on a case-by-case basis to determine whether the transaction is contrary to the national security or foreign policy interests of the United States. Such applications will also be reviewed consistent with U.S. arms embargoes and whether the export or reexport could contribute directly or indirectly to any country’s military capabilities in a manner that would alter or destabilize a region’s military balance contrary to the foreign policy interests of the United States. Further, the IFR identifies the 36 destinations noted above (High-Risk Destinations for Firearms and Related Items) and notes that license applications to these countries will be reviewed under a “presumption of denial.” A policy of denial will also apply when BIS has reason to believe the transaction involves criminal organizations, rebel groups, street gangs, or other similar groups or individuals. The IFR also makes several changes to license requirements, exceptions and the validity period for firearm licenses issued by BIS.
Revocation and Modification of Existing Licenses
Based on the policy changes implemented by this IFR, BIS has announced that it will revoke or modify certain valid licenses for the export and reexport of firearms and related items to non-government end users in destinations identified as High-Risk Destinations for Firearms and Related Items as of July 1, 2024. In addition, on May 30, 2024, BIS will modify certain other valid licenses with validity periods that end more than one year from the effective date of this IFR by rendering them invalid one year from the effective date of this IFR.
For exporters or reexporters of firearms, this 130 page IFR contains detailed revisions and additions that will require a robust analysis in order to remain compliant with the EAR. Ultimately, BIS believes that these regulatory changes “will facilitate more robust data tracking capabilities for exports and re-exports of firearms and related items … [and] enhance the ability of BIS and its interagency partners to review and process license applications consistent with U.S. national security and foreign policy interests.” BIS is accepting public comment on this interim final rule until July 1, 2024.