It may be summer and COVID-19 is still impacting everyone, but it is not a time to stop paying attention to export compliance! The U.S. Government is working away updating policies, expanding services and asking for your comments on export controls.
Unmanned Aerial Systems Policy Adjustment
On July 24, 2020, the White House announced a revision in the standards for exporting Unmanned Aerial Systems (UAS) under the Missile Technology Control Regime (MTCR). U.S. export policy will now consider “a carefully selected subset of MTCR Category I UAS, which cannot travel faster than 800 kilometers per hour, as Category I.” Higher speed UAS such as such as cruise missiles and hypersonic aerial vehicles remain subject to the Category I presumption of denial, while exportability will improve for larger, lower speed systems that already face competition from countries such as China and Israel. Fortunately complex interagency review will still be required for any such export licenses.
For additional detail on the changes and rationale, a video event has been recorded with Assistant Secretary Assistant Secretary of State Christopher Ford on the topic of “U.S. Policy and the Missile Technology Control Regime.” You can access the video on the website of the Hudson Institute.
DDTC Policy and Process Notices
The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) has made a series of announcements on their website, including:
- International Traffic in Arms Regulations: Notification of Temporary Suspension, Modification, or Exception to Regulations due to SARS-COV2 (85 FR 45513, July 29, 2020) for the continued telework of employees.
- Electronic Submissions of 60-Day Advance Notifications of Mergers, Acquisitions, and Divestitures (MAD).
- Use of DECCS form DS-6004 DS-6004 “Reexport/Retransfer Application – ITAR Part 123.9” to submit General Correspondence (GC) requests related to Mergers and Acquisitions, U.S. and Foreign Entity Name/Address Changes or Registration Code Changes, U.S. Persons providing defense services abroad, End-Use/End-User Change Requests, and Amendments to existing General Correspondence approvals.
- Rescission of its firearms sound suppressor policy, potentially allowing the export of sound suppressors for civilian end-use (e.g., for use by individuals at gun ranges):
Effective immediately, the Department of State has rescinded its April 18, 2002, firearms sound suppressor policy. This policy provided for enhanced guidelines for the approval and issuance of export licenses for sound suppressors and restricted their export to only official end users such as government or military entities. Henceforth, DDTC will handle suppressor exports in a manner consistent with other USML-controlled technologies. This requires that applicants must identify a specific end user. Applications for the permanent export of hardware must include purchase documentation, a DSP-83 non-transfer and end use certificate (as suppressors are considered Significant Military Equipment under the USML), an end-user statement, and an import permit (if required by the destination country). Consistent with current licensing practices, all licenses will be reviewed and adjudicated on a case-by-case basis, and any pre-license checks or post shipment verifications will be conducted as deemed necessary and appropriate based on the totality of the circumstances of the transaction. Standard staffing protocols within the Department and interagency will be applied as required.
Central African Republic 126.1 Entry Revised
On July 22, 2020, DDTC published a final rule (85 FR 44188), revising the International Traffic in Arms Regulations (ITAR) §126.1 entry for the Central African Republic. The Central African Republic remains a prohibited destination under ITAR §126.1(u), subject to revised exceptions under United Nations Security Council resolutions. UN notification and/or approval is required for the case-by-case issuance of licenses or other approvals. DDTC approval is still required for brokering proposals to the Central African Republic.
Russian Pipelines Subject to CAATSA Sanctions
On July 23, 2020, the Department of State published an “Update to the Public Guidance for Section 232 of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) (85 FR 44561) effective July 15, 2020. The notice does not impose any new sanctions, but clarifies that CAATSA sanctions may apply to “Russian energy export pipelines such as Nord Stream 2 and the second line of TurkStream.”
Commerce Publishes EAR Amendment for Hong Kong
Finally, on July 31, 2020, BIS published a rule (85 FR 45998) suspending “the availability of all License Exceptions for Hong Kong that provide differential treatment as compared to those available to the People’s Republic of China (PRC).” This rule implements the previously announced end to Hong Kong’s special status under the Export Administration Regulations (EAR).