Preventing Unauthorized Reexports to Russia is Aim of Additional BIS Guidance
The Bureau of Industry and Security is providing additional guidance to U.S. exporters to prevent unauthorized reexports to Russia, especially for transactions involving national security-controlled items or items that are subject to the military end use license requirement.
In response the ongoing situation in Crimea, BIS has previously imposed export restrictions targeted at Russia’s energy and defense sectors. These include restrictions on exports of certain items destined for Russian deep water, Arctic offshore or shale energy exploration or production; a license requirement on various items that may not otherwise require a license if the exporter has knowledge that such items may be used by military end users or for military end uses in Russia; and expanded controls on certain microprocessors for military end uses and end users in Russia (as well as other D:1 countries). However, BIS remains concerned about efforts by front companies and other intermediaries who are not the true final end users to transship or reexport U.S.-origin items to Russia in violation of these measures and other export controls.
BIS is therefore providing the following additional guidance to combat these efforts.
- Whenever a person who is clearly not going to be using the item for its intended end use (e.g., a
freight forwarder) is listed as an export item’s final destination, the exporter has an affirmative duty to inquire about the end use, end user and ultimate destination of the item to ensure the transaction complies with the EAR. In addition, the exporter should pay attention to any information that may indicate an unlawful diversion is planned; e.g., discrepancies in the destination country and the country from which an order is placed or payment is made.
- When inquiring into the ultimate destination of the item, an exporter should consider e-mail address and telephone number country codes and languages used in communications from customers or on a customer’s website. The exporter should also research the intermediate and ultimate consignees and purchaser, as well as their addresses, using business registers, company profiles, websites and other resources.
- Exporters should always screen their customers against the U.S. government’s consolidated export screening list. An interactive tool for searching this list based on entity name and address is available here.
- Exporters should pay attention to the countries a freight forwarder serves as well as the industry sectors a distributor or other non-end user customer supplies. The exporter should then determine whether a license is required based on the likely country of ultimate destination and end use and end user. The exporter should consider not only the list-based license requirements specified in Supplement No. 1 to Part 738 of the EAR (the Commerce Country Chart) in conjunction with the item’s classification specified in Supplement No. 1 to Part 774 of the EAR (the Commerce Control List) but also the end use and end user controls in Part 744 and the embargoes and special controls in Part 746. If the exporter continues to have any doubts or concerns surrounding the end use, end user or country of ultimate destination after exercising due diligence, the exporter should present all relevant information to BIS in the form of a license application or refrain from the transaction.