Commerce Tightens Licensing Policy for U.S. Exports to Russia and Yemen

On February 24, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a Federal Register notice announcing amendments to the Export Administration Regulations (EAR) that revise export licensing policy toward the Russian Federation and Yemen based on national security and foreign policy concerns. Under the EAR, BIS has established various “Country Group” designations that broadly establish licensing requirements based on the country of destination for an export of an item controlled for export from the United States.

Russia has been moved from the more favorable export licensing treatment of Country Group A to Country Group D. It has been removed from Country Groups A:2 (Missile Technology Control Regime) and A:4 (Nuclear Suppliers Group) and added to the more restrictive Country Groups D:2 (Nuclear) and D:4 (Missile Technology). BIS notes that this change was made to address U.S. concerns about diversion of U.S.-origin items to or from Russia for prohibited end uses and end users. BIS has revised the licensing policy for items to Russia to a “presumption of denial” when the items are controlled for such reasons as: (i) proliferation of chemical and biological weapons; (ii) nuclear nonproliferation; and (iii) missile technology under the EAR. These amendments “address U.S. concerns about Russia’s lack of cooperation and accountability for U.S.-origin items and diversion to unauthorized or prohibited proliferation activities, end uses, and end users. Specifically, Russia has not been cooperative in allowing BIS to perform pre-license checks or post-shipment verifications related to U.S.-origin goods.”

Yemen has been moved from Country Group B to Country Group D — specifically, Country Group D:1 (National Security). BIS notes that this change has been made to address concerns about diversion of U.S.-origin items in Yemen for unauthorized purposes, including prohibited proliferation activities, end uses, and end users. According to BIS, the “ongoing conflict in Yemen has fostered international terrorism and instability in the Arabian Peninsula, including the proliferation of small arms, unmanned aerial systems, and missiles.”

As a result of these amended Country Group designations, a number of license exceptions will no longer be available for Russia and Yemen, and items previously allowed to be exported without a license may now require approval from BIS. U.S. goods on the dock for loading or en route aboard a carrier to a port of export as of February 24, 2020, may proceed to that destination under the previous license exception eligibility or without a license. Any U.S. goods not actually exported before midnight on February 25, 2020 will, as necessary, require a license in accordance with these Country Group amendments.