On July 28, 2016, the Commerce Department and the State Department issued new final rules effective December 31, 2016 regarding certain plant and animal pathogens, viruses, toxins, biological materials, and chemical agents as well as coatings, protective gear, and related items. These rules will affect companies engaging in certain Research and Development in the life sciences and other industries as well as those manufacturing or exporting medical countermeasures, vaccines, protective equipment, and other items.

The final rules describe how articles the President has determined no longer warrant control under USML Category XIV (Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment) or Category XVIII (Directed Energy Weapons) are now controlled under the Commerce Control List (CCL). For example, the rules amend the CCL and the United States Munitions List (USML), respectively, to move certain medical countermeasures to the CCL under Export Control Classification Number (ECCN) 1A607.k. Selected points in the final rules include:

State Department Final Rule

  • USML Category XIV identifies certain “Tier 1” pathogens and toxins that meet certain capabilities (and their non-naturally occurring genetic elements) established in the Department of Health and Human Services and the U.S. Department of Agriculture select agents and toxins regulations. Any pathogens and agents that do not meet these capabilities remain controlled in ECCN 1C351 and other entries on the CCL.
  • Riot control agents are moving to the CCL, as well as certain test facilities, equipment for the destruction of chemical and biological agents, and tooling for production of articles.
  • USML Category XVIII, covering directed energy weapons, has been revised to control only certain articles and to exclude articles that may incidentally, accidentally, or collaterally achieve the same effects.
  • USML Category XIV includes certain equipment, software, sorbents, and countermeasures developed under Department of Defense contract or funding authorization, as well as certain vaccines exclusively funded by a Department of Defense contract, including recombinant plague vaccine and vaccines specially designed for the sole purpose of protecting against biological agents and biologically derived substances.
  • USML Category XVIII includes developmental directed energy weapons funded by the Department of Defense via contract or other funding authorization.

Commerce Department Final Rule

  • The Commerce Department’s final rule creates new “600 Series” ECCNs to cover items that have transitioned from USML Category XIV to the CCL, including dissemination, detection, and protection “equipment” and related articles, as follows: ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607.
    • ECCN 1A607.f is revised to include “air conditioning units, protective coatings, and protective clothing.’’ The final rule further clarified that this ECCN includes Chemical Agent Resistant Coatings (CARC).
    • ECCN 1A607.k is revised to include “medical countermeasures that are ‘specially designed’ for military use (including pre- and post-treatments, antidotes, and medical diagnostics) and ‘specially designed’ to counter chemical agents controlled by USML Category XIV(a).”
  • The final rule creates new “600 Series” ECCNS for items that have transitioned from USML Category XVIII to the CCL, including tooling, production equipment, test and evaluation equipment, test models, and related articles, as follows: ECCNs 6B619, 6D619, and 6E619.
  • The new “600 Series” ECCNS are controlled for national security (NS), regional stability (RS), anti-terrorism (AT), and United Nations (UN) reasons and are subject to the applicable licensing policies for such controls.
  • Items controlled under the new 600 Series ECCNS created by this rule are eligible for de minimis treatment under the EAR, provided that the foreign-made items into which they are incorporated are not destined for a country listed in Country Group D:5.
  • The final rule amends License Exception Temporary imports, exports, reexports, and transfers (in-country) (TMP) to authorize temporary exports, reexports, or in-country transfers of chemical or biological agent personal protective equipment classified under ECCN 1A613.c or .d and individual protection equipment classified under ECCN 1A607.f consistent with the requirements and restrictions described therein.
  • The final rule amends License Exception Baggage (BAG) to authorize exports, reexports, or in-country transfers of chemical or biological agent personal protective equipment classified under ECCN 1A613.c or .d and individual protection equipment under ECCN 1A607.f consistent with the requirements and restrictions described therein.

It is important to carefully review the new provisions, particularly with respect to technology transfer as well as certain research funded by the Department of Defense. Companies should assess the controls on so-called Tier 1 pathogens and toxins, including for example, Bacillus anthracis, Ebola virus, Foot and mouth disease virus, Smallpox virus, and Yersinia pestis, meeting certain modified criteria.