We have a handful of developments out of the Commerce Department, with revisions to controlled items, human rights review, and license extensions. At the end, there are two developments out of Middle East
Commerce Implements 2018 & 2019 Wassenaar Revisions
On September 11, 2020, the Department of Commerce, Bureau of Industry and Security (BIS) published a rule (85 FR 56294) implementing changes to the Wassenaar Arrangement List of Dual-Use Goods and Technologies made at the December 2018 Plenary meeting.
The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies is a global multilateral export control regime, covering both conventional weapons and sensitive dual-use goods and technologies. Participants agree to control exports and retransfers of items on a control list of dual-use goods and technologies and munitions. Its Plenary meeting normally occurs once a year in December in Vienna, Austria. CCL revisions take effect when officially amended through a Federal Register notice
BIS previously issued a rule in May 2019 that added and revised five ECCNs based on the December 2018 Plenary meeting. The new rule reflects the changes that were remaining:
Revisions to 28 ECCNs:
- 0A617
- 1C001
- 2A001, 2B003, 2B006
- 3A001, 3A002, 3B001, 3E003
- 5E001, 5A002, 5D002, 5E002, 5E992
- 6A003, 6A005,
- 7A002, 7A003, 7A005, 7D003, 7D005,
- 8A001, 8A002
- 8B001, 9A010, 9A610, 9B001, & 9E003.
License Exception Revisions to ECCNs:
- 1C004 (GBS)
- 8A001 (LVS & STA)
- 8D001 (TSR, STA)
- 8E001 (TSR, STA)
New ECCN:
- 6B002 (masks and reticles for optical sensors specified in 6A002.a.1.b or 6A002.a.1.d).
Conforming Changes to Eight ECCNs:
- 0A606
- 1A008
- 3A991
- 6A002, 6E001, 6E002
- 8D001 & 8E001.
A series of corrections to the September ECCN revisions were published on December 4, 2020 (85 FR 78684), affecting some technical specifications and revising technical notes.
On October 5, 2020, BIS published a rule (85 FR 62583) implementing changes to the Wassenaar Arrangement List of Dual-Use Goods and Technologies made at the December 2019 Plenary meeting. The changes harmonize the Commerce Control List (CCL) with the multilateral Wassenaar Arrangement by adding six emerging technologies:
- Hybrid additive manufacturing/computer numerically controlled tools
- Computational lithography software designed for the fabrication of extreme ultraviolet masks
- Technology for finishing wafers for 5 nanometer integrated circuit production
- Digital forensics tools that circumvent authentication or authorization controls on a computer and extract raw data
- Software for monitoring and analysis of communications and metadata acquired from a telecommunications service provider via a handover interface
- Sub-orbital spacecraft
The specific Export Control Classification Numbers (ECCNs) affected are as follows:
Revised: 2B001, 3D003, 5E001, 5A004, 9A004
Revised: 5D002, 5E002, 9A012, 9A515
Corrected: 5D001
Added: 3E004
Eligibility to use the License Exception ENC was also revised to include digital forensics items (investigative tools).
For complete details on the revisions, refer to the Federal Register Notice. BIS also published a press release on these and related changes to the CCL.
Proposed Controls on Nucleic Acid Assembler and Synthesizer Software
On November 6, 2020, BIS published a proposed rule (85 FR 71012) which would control software related to nucleic acid assemblers and synthesizers. The proposed rule would create a new ECCN 2D352 related to existing ECCN 2B352.j. Both ECCNs would be controlled under CB (chemical and biological weapons) column 2 and AT (anti-terrorism) column 1. This proposal is in addition to current Wassenaar or Australia Group controls. Comments may be submitted through December 21, 2020.
Commerce Announces Human Rights Reviews & Controls on Water Cannons
On October 6, 2020, BIS published a rule (85 FR 63007) amending the Export Administration Regulations (EAR) to provide for human rights review for items controlled for CC (crime control) purposes, as well as all license applications (“except for items controlled for short supply reasons”). In the Federal Register Notice, BIS notes that:
BIS will generally consider license applications favorably on a case-by-case basis unless there is civil disorder in the country or region of destination or unless there is evidence that the government of the importing country may have violated internationally recognized human rights.
This follows on the September release of surveillance and human rights guidance by the Department of State, Bureau of Democracy, Human Rights, and Labor (DRL).
Also on October 6, 2020, BIS published a rule (85 FR 63009) which creates a license requirement for “water cannon systems for riot or crowd control and parts and components specially designed therefor.” The new rule creates ECCNs 0A977, 0D977 and 0E977 which will require licenses for export to countries designated under CC (crime control) Column 1 of the Commerce Country Chart.
This action was directed by Public Law 116-77 “to prohibit the commercial export of covered munitions items to the Hong Kong Police Force,” but also affects exports to other countries. The license requirement will apply to most countries except for NATO allies and some other military allies and subjects water cannons to human rights review.
Revised National Security Review for China, Venezuela, and Russia
On October 29, 2020, BIS published a rule (85 FR 68448) “to revise the license review policy for items controlled for national security reasons destined to the People’s Republic of China (PRC), Venezuela, or the Russian Federation (Russia).” The focus of the policy will be whether the National Security (NS) controlled items “make a material contribution” to those countries’ weapons systems subject to a presumption of denial.
Commerce Offers License Extensions
On October 16, 2020, BIS announced that exporters may request a six-month extension for licenses due to expire on or before December 31, 2020.
Requests should be sent by email to LicenseExtensionRequest@bis.doc.gov and BIS expects to review and approve extensions within two to three business days.
Antiboycott & Anti-Terrorism Updates for UAE & Sudan?
Two developing stories that we are watching, but that have not yet been reflected in regulations are based on diplomatic agreements with the United Arab Emirates (UAE) and Sudan.
The Department of the Treasury released its current list of “countries which require or may require participation in, or cooperation with, an international boycott” (85 FR 64615). The list includes:
- Iraq
- Kuwait
- Lebanon
- Libya
- Qatar
- Saudi Arabia
- Syria
- United Arab Emirates
- Yemen
There are no changes compared to last year’s release (84 FR 54730, October 10, 2019), but the notice does state that “Treasury is monitoring the situation of the United Arab Emirates, which has announced the issuance of a decree repealing its boycott law.” The UAE and Israel recently agreed to normalization of relations. A similar agreement was reached between Israel and Bahrain, but Bahrain was not included on the Treasury list.
On October 23, 2020, the White House announced the President’s intention to “formally rescind Sudan’s designation as a State Sponsor of Terrorism.” This action is based on an agreement reached with Sudan resolving “certain claims of United States victims of terror and their families.” Following a 45-day Congressional notification window, the designation may be rescinded. Sudan is currently the only country designated as requiring export licenses for Anti-Terrorism (AT) purposes on the Commerce Country Chart that is not subject to comprehensive restrictions. This requirement should be revised following the formal rescission.