Background

The Bureau of Industry and Security is proposing to expand and clarify restrictions on the availability of license exception STA (strategic trade authorization). Comments on this proposed rule are due no later than Dec. 6. For more information on this rule and how it may affect your business, please contact attorney Kristine Pirnia via email.

License exception STA authorizes exports, reexports, and transfers (in-country) of specified items to STA-eligible destinations, including the release of certain software source code and technology as well as certain 600 series items. There are a total of 45 STA-eligible destinations, which pose low risk that subject items will be used for a purpose that BIS license requirements are designed to prevent. The requirements and conditions for the use of this license exception include the creation and exchange by the parties to the transaction of notifications and statements designed to provide assurance against diversion of subject items to other destinations.

The proposed rule would expand restrictions on the use of license exception STA for ECCN 2E003.f technology (regarding the application of inorganic overlay coatings or inorganic surface modification coatings to non-electronic substrates by certain coating processes) when it is used for the application of inorganic overlay coatings on gas turbine engine combustors or turbine blades, vanes, or “tip shrouds.” It would also exclude STA eligibility to all destinations for technology described by ECCN 1E001 for the development or production of equipment and materials specified by ECCNs 1A002, 1C001, 1C007.c, 1C008.a.a, 1C009.b, and 1C010.b., .c, or .d.

Further, this rule would clarify the availability of license exception STA in certain circumstances. BIS explains that EAR section 740.20(b)(2)(viii) prohibits the use of STA for certain Category 9 ECCNs regardless of destination but that the “Special Conditions for STA” paragraphs of those ECCNs state that STA eligibility is excluded only to destinations in Country Group A:6. To reduce confusion, this rule would revise those paragraphs to direct exporters, reexporters, and in-country transferors to the limitations in 740.20(b)(2)(viii). BIS states that this clarification would not change existing license requirements or restrictions.

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