The Bureau of Industry and Security has announced that, starting on December 8, a new license condition will appear on all validated licenses. That condition reads as follows:

Unless limited by a condition set forth below, the export, reexport or transfer (in-country) authorized by this license is for the item(s), end-use(s), and parties described in the license application and any letters of explanation. The applicant is responsible for informing the other parties identified on the license, such as ultimate consignees and end-users, of the license’s scope and of the specific conditions applicable to them. BIS has granted this license in reliance on representations the applicant made in the license application, letters of explanation, and other documents submitted.

The laudable purpose here is to get rid of the silly license conditions that simply reiterate existing requirements of the Export Administration Regulations, such as Part 744′s prohibition on nuclear end uses. BIS is concerned about possibility that the existence of, say, the no nuclear use condition will give someone the idea that it is okay to allow the exported item to be used in the production of chemical weapons in violation of section 744.4 of the EAR. Expressio unius and all that.

But I wonder, and the BIS announcement does not say, whether the language quoted above will replace the following condition that is included, in one form or another, on all licenses:

No resale, transfer, or reexport of the items listed on this license is authorized without prior authorization by the U.S. Government.

The issue here is an odd lacuna in the EAR. If you look through the General Prohibitions, there is no explicit prohibition against in-country transfers of items exported under license. The prohibitions on certain exports and re-exports do not, by definition, reach in-country transfers. Rather the General Prohibitions only address in-country transfers in connection with denial orders (General Prohibition 4) and illegally exported items (General Prohibition 10). Instead, the way that in-country transfers are prohibited is through General Prohibition 9, which prohibits violation of any license condition, such as the one quoted above, which makes clear that no in-country transfer can occur with U.S. Government approval.

The new license condition is worded in such a way that it seems possible that it will replace the standard condition prohibiting resale, transfer or re-export without government approval. But if it does, BIS will have unintentionally opened the door to unlicensed in-country transfer of items exported under license.