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New Restrictions on Exports of EAR-Regulated Goods to Foreign Entities

Wednesday, September 07, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued a final rule that, effective Sept. 7, adds 81 persons under 86 entries in Hong Kong, India, Russia, and the Crimea region of Ukraine to the list of entities restricted from receiving U.S. exports of goods controlled under the Export Administration Regulations. BIS is taking this action to ensure the efficacy of existing sanctions on Russia for violating international law and fueling the conflict in eastern Ukraine.

For 30 entities there will be a license requirement for all items subject to the EAR and a license review policy of presumption of denial. The license requirement applies to any transaction in which items are to be exported, reexported or transferred (in-country) to any of these entities or in which they act as purchaser, intermediate consignee, ultimate consignee or end-user.

For 51 entities (subsidiaries of Gazprom OAO) there will be a license requirement for the export, reexport, or transfer (in-country) of all items subject to the EAR to those companies when the exporter, reexporter, or transferor knows that the item will be used directly or indirectly in exploration for, or production of, oil or gas in Russian deepwater (greater than 500 feet) or Arctic offshore locations or shale formations in Russia, or is unable to determine whether the item will be used in such projects. License applications for these entities and these uses will be reviewed with a presumption of denial.

No license exceptions are available for exports, reexports, or transfers (in-country) to any of these 81 entities.

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