Background

Exports to China, Venezuela, and Russia of items controlled for national security reasons will be subject to a more restrictive licensing policy under a new final rule from the Bureau of Industry and Security that took effect Oct. 29.

Under this rule, all applications for licenses to export such goods will be reviewed to determine the risk the goods will be diverted to a military end-user or end-use. There is a general policy of approval for applications to export, reexport, or transfer items determined to be for civil end-users for civil end-uses. There is a presumption of denial for items that would make a material contribution to the development, production, maintenance, repair, or operation of weapons systems, subsystems, and assemblies of these countries.

This rule also sets forth the following factors that will be considered in reviewing license applications.

- the appropriateness of the export, reexport, or transfer for the stated end-use

- the significance of the item for the weapons systems capabilities of the importing country

- whether any party is a military end-user

- the reliability of the parties to the transaction, including whether (1) an export or reexport license application has previously been denied, (2) any parties are or have been engaged in unlawful procurement or diversion activities, (3) the parties are capable of securely handling and storing the items, and (4) end-use checks have been and may be conducted by BIS or another U.S. government agency on parties to the transaction

- the involvement of any party to the transaction in military activities, including activities involving the development, production, maintenance, repair, or operation of weapons systems, subsystems, and assemblies

- government strategies and policies that support the diversion of exports from their stated civil end-use and redirection towards military end-use

- the scope and effectiveness of the export control system in the importing country

- the impact of the proposed export (or denial thereof) on the U.S. defense industrial base

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