BIS Issues Licensing Policy for the Crimea Region of Ukraine
Late last month, BIS issued a final rule imposing additional sanctions to implement U.S. policy toward Russia. The rule establishes a license requirement to export and re-export to Crimea, and to transfer within Crimea, items subject to the Export Administration Regulations (EAR), with exceptions for food and medicine designated as EAR99. Moreover, the rule imposes a presumption of denial for such licenses related to items other than the agricultural commodities, medicine, medical supplies and replacement parts outlined in OFAC’s General License Number 4, which BIS will consider on a case-by-case basis. The final rule is an example of the Obama administration’s effort to increase pressure on Russia for its actions in Crimea.
OFAC Publishes Ukraine-Related General Licenses
OFAC published three Crimea-related general licenses in late January 2015. The general licenses provide authorization for certain activities otherwise prohibited by the U.S. comprehensive import, export and investment ban against Crimea.
General License Number 6 authorizes U.S. persons to send and receive noncommercial, personal remittances to or from Crimea, provided no blocked person is involved in the transaction.
General License Number 7 authorizes U.S. financial institutions to operate accounts for individuals “ordinarily resident” in Crimea who are authorized to receive noncommercial, personal remittances under General License Number 6.
General License Number 8 authorizes transactions with respect to the receipt and transmission of telecommunications. The general license explicitly does not authorize the provision, sale or lease of telecommunications equipment, technology or capacity on telecommunications transmission facilities (such as satellite or terrestrial network activity). General License Number 8 also authorizes transactions of common carriers incident to the receipt or transmission of mail and packages between the United States and Crimea, provided that the import or export of such mail and packages is exempt from the U.S. import, export and investment ban against Crimea.
OFAC, BIS Relax Controls on Certain Items Related to Personal Communications in Sudan
Earlier this month, in consultation with BIS and the U.S. Department of State, OFAC adopted a final rule to amend the SSR by issuing a general license for certain hardware, software and services pertaining to personal communications. A much more limited 2010 general license also permitted the export of certain software and services related to personal communications. OFAC expanded the 2010 general license in furtherance of U.S. government policy to advance free information flow and facilitate communications by the Sudanese.
BIS concurrently amended the EAR to modify its licensing policy from denial to case-by-case review for license requests to export and re-export to Sudan telecommunications equipment and associated software, computers and technology for civil end use. BIS also expanded its license exception, Consumer Communications Devices (CCD), previously applicable only to Cuba, to encompass exports and re-exports of certain consumer communications devices to Sudan.
United States Establishes Export Policy for Military Unmanned Aerial Systems
The U.S. Department of State announced on February 17, 2015, that the United States has established a new policy on the international sale, transfer and use of U.S.-origin commercial and military unmanned aerial systems (drones). Under the policy, the United States will “exercise restraint in sales and transfers” of drones. The policy is consistent with the requirements of the EAR, which governs U.S. commercial transfers, and the Foreign Assistance Act and AECA, which govern U.S. military transfers. The announcement focused on the export of military drones and stated that the new policy builds on the U.S. Conventional Arms Transfer Policy.
According to the announcement, the U.S. government will review potential exports of military drones, including armed drones, on a case-by-case basis. Such exports will require stringent conditions, which may require recipients to provide end-use assurances and permit end-use monitoring. Recipients will be required to agree to principles for proper use before the United State authorizes transfer or sale of military drones. These principles state that the recipient: 1) must use the drone in accordance with international law; 2) may not use the drone in operations involving force unless international law provides a basis for such use of force; 3) may not use the drone to conduct illegal surveillance or employ force against the recipient’s domestic population; 4) will provide operators with training, as appropriate, to minimize the risk of accidental damage or injury.
The State Department emphasized that requests to export commercial or military drones subject to the Missile Technology Control Regime (MTCR) under Category I–commercial and military systems with a range of 300 kilometers or more that can carry a load of at least 500 kilograms–will face a presumption of denial but may be permitted on rare occasions.
BIS Removes Export Restriction on Certain Etch Equipment through Foreign Availability Assessment
BIS removed export control restrictions on certain etch equipment and technology, previously controlled for national security reasons under Export Control Classification Number 3B001.c. The global trade organization for the micro- and nano-electronic manufacturing supply chains, SEMI, petitioned BIS for a foreign availability assessment (FAA) to examine the foreign availability of anisotropic plasma dry etching equipment. Under the FAA process, BIS conducts an analysis to determine the overseas availability of a particular item. Upon finding that an item is “foreign available,” BIS may decontrol the item for national security reasons or approve a previously-denied license request.