Background

The Bureau of Industry and Security has issued a final rule adding a new military end-user list to the Export Administration Regulations and placing 57 Chinese and 45 Russian companies on this list.

Effective Dec. 23, 2020, a license is required to export, reexport, or transfer (in-country) designated items to entities on this list, but BIS’ license review policy will be a presumption of denial. In addition, no EAR license exceptions are available for such shipments except those authorized under the provisions of license exception GOV.

According to BIS, the MEU list supports the export community by identifying military end users known to the U.S. government. However, BIS adds that this list is not exhaustive and that an entity’s exclusion from the list is not necessarily indicative of whether or not a license is required for shipments of subject goods to that entity.

As a result, said Kristine Pirnia, leader of Sandler, Travis & Rosenberg’s Export Controls and Sanctions Practice, the MEU list should not be viewed as a substitute for conducting due diligence to determine whether entities not on the list may also be subject to military end-use and end-user controls under the EAR. For example, BIS states, entities not on the MEU list but included on the Department of Defense’s Section 1237 list would raise a red flag under the EAR and require additional due diligence by exporters, reexporters, or transferors.

For more information on this rule, please contact Kristine Pirnia.

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