Background

The Bureau of Industry and Security is warning third-country companies and governments that they could find themselves subject to export controls imposed in response to Russia’s war against Ukraine.

As part of a rule that went into effect Sept. 15, the military end-user controls in section 744.21 of Export Administration Regulations have been expanded to allow BIS to (1) designate entities in third countries that support military end-uses in Russia or Belarus as Russian and Belarusian military end-users on the Entity List and (2) apply the Russian/Belarusian MEU foreign direct product rule to these entities. BIS states that it is prepared to “aggressively apply” these export controls against any entities, whether inside or outside of Russia, that seek to provide material support for Russia’s and Belarus’s military and industrial sectors, including to replenish (backfill) technologies and other items prohibited by the U.S. and others that have implemented substantially similar controls.

According to BIS, entities in third countries designated on the Entity List as Russian MEUs will have a footnote 3 designation in the license requirement column. A license is required when a footnote 3 entity is a party to any export, reexport, or transfer (in-country) – e.g., as a purchaser, intermediate consignee, ultimate consignee, or end-user, involving not only U.S.-origin items or items located in the U.S. but also foreign-produced items that are (1) the direct product of any software or technology subject to the EAR and specified in any ECCN in product groups D or E on the CCL, or (2) produced by any plant or major component of a plant located outside the U.S. when the plant or major component of a plant itself is a direct product of U.S.-origin technology or software that is specified in any ECCN in product groups D or E in any categories of the CCL. Any foreign-produced item meeting these criteria, including items that would be designated EAR99, would require a license.

For more information on restrictions on exports to persons on the Entity List or other lists, please contact Kristine Pirnia at (202) 730-4964 or via email.

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