The Bureau of Industry and Security has issued two proposed rules (available here and here) that would amend the Export Administration Regulations to impose enhanced restrictions on exports, reexports, or support to military or intelligence end-users and end-uses in countries of concern. In a related move, the State Department is proposing to revise the scope of defense services controlled under the International Traffic in Arms Regulations. Comments on these proposals are due by Sept. 27.
For more information on these rules and how they may affect your business, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.
According to an agency press release, the specific controls proposed in the BIS rules include the following.
- expanded restrictions on U.S. persons’ support activities regarding end-uses and end-users of concern, including facilitating the acquisition of certain foreign-origin items by military, intelligence, and security services of concern, as well as performing maintenance, repair, and overhaul of such items
- expanded restrictions on all items subject to the EAR when destined to the armed forces or national guard of countries subjected to a U.S. arms embargo as well as civilian or military intelligence agencies of more than 40 countries of concern
- expanded controls on all items on the Commerce Control List when destined to foreign-security end-users (e.g., police and security agencies) or military-support end-users (e.g., defense contractors) in countries subject to a U.S. arms embargo
- new restrictions on the export of certain facial recognition technologies that can enable mass surveillance
BIS states that these proposals complement controls maintained by other federal agencies, including controls on defense articles and services administered by State’s Department of Defense Trade Controls pursuant to the ITAR, as well as restrictions on U.S. persons’ services maintained by the Treasury Department’s Office of Foreign Assets Control under various sanctions programs. BIS states that under its proposed rules U.S. persons would not be required to obtain a BIS license to engage in activities regulated by another federal department or agency or required in furtherance of defense services authorized by DDTC.
Regarding its proposed rule, State notes that during a recent review of defense services DDTC identified certain military, cyber, and intelligence services furnished to foreign persons that are not currently controlled or are controlled but those controls could use additional clarity. DDTC is therefore proposing a new definition of “defense service,” a detailed articulation of currently and newly controlled services on the U.S. Munitions List, and language that would provide the basis for regulating certain proposed new services as defense services.
Among other things this proposal would require DDTC review prior to furnishing intelligence-related assistance that is not directly related to a defense article to certain types of foreign persons (i.e., a foreign unit, force, or government) or their proxies or agents. State assessed that these activities warrant and require control equivalent to those of intelligence-related defense articles since such assistance (including training or consulting) similarly furnishes a critical military or intelligence advantage to the foreign person.
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