BIS Tightens National Security Export Controls

On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) published two final rules and one proposed rule that will result in tighter restrictions on exports, reexports, and in-country transfers of dual-use items subject to the Export Administration Regulations (EAR) and controlled for national security reasons to China, Russia, Venezuela, and a number of other countries.

Companies involved in exports and reexports of controlled items to these countries should carefully review the changes.

The two final rules, both of which will become effective on June 27, 2020: (i) remove a license exception available for exports of items controlled for national security reasons to China, Russia, Venezuela, and other countries subject to national security controls so long as the items are destined to civil end users for civil end uses (license exception CIV); and (ii) expand existing restrictions on exports, reexports, and transfers of certain items subject to the EAR to cover military end users as well as military end uses in China (i.e., nominally civilian uses by military entities).  The stated reason for these changes is to ensure case-by-case review of exports of national-security controlled items to countries of national security concern, even where purportedly destined for civil use, noting that integration of civil and defense technology development increases the risk that high-tech exports may undermine U.S. interests and makes it increasingly difficult for private exporters to reliably determine whether an export may have a military end use.

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