In response to Russian actions in Ukraine, the U.S. has suspended the licensing of new exports or re-exports of goods and services to Russia until further notice. Two federal agencies charged with overseeing U.S. exports, the Department of Commerce and the Department of State, announced separately that they would be halting the issuance of new licenses until further notice.

Department of Commerce

The Department of Commerce’s move was announced on 25 March 2014 on the website of the Bureau of Industry and Security (BIS), which administers the export licensing process for items on the Export Administration Regulations (EAR) Commerce Control List. The notice reads, “Since March 1, 2014, BIS has placed a hold on the issuance of licenses that would authorize the export or re-export of items to Russia. BIS will continue this practice until further notice.” No further details were provided in the notice, but a BIS official has confirmed that the policy applies to new license applications only; existing licenses remain valid and use of license exceptions is not impacted at this time. The official indicated that BIS anticipates issuing further guidance within a week, likely in the form of a website notice or an update to BIS’ FAQs. If necessary, a change to the EAR will be made.

According to BIS’ annual report, BIS approved more than 1,800 license applications for exports (worth about US$1.5 billion) to Russia in fiscal year 2013. However, U.S.-origin items that are classified as EAR99 or subject to anti-terrorism controls generally do not require a license to be exported to Russia, and such overall trade with Russia will not be affected by this policy change. Exports or re-exports of such items to Russian entities on U.S. Restricted Parties Lists, including the List of Specially Designated Nationals and Blocked Persons and the Entity List, may require prior authorization from the U.S. government.

Department of State

The Department of State’s Directorate of Defense Trade Controls (DDTC), which administers the export licensing process for defense articles and services on the International Traffic in Arms Regulations U.S. Munitions List, has also suspended the issuance of licenses that would authorize exports or re-exports to Russia until further notice. A 27 March 2014 announcement on the DDTC’s website reads, “The Department of State has placed a hold on the issuance of licenses that would authorize the export of defense articles and defense services to Russia. State will continue this practice until further notice.” Like the Commerce Department, the State Department has advised that it will be providing additional guidance.

Department of Energy

The Department of Energy (DOE) has not made any formal announcement regarding authorizations for the transfer of nuclear-related technology or services under the Part 810 Regulations. We understand that DOE has not broadly suspended the processing of specific authorizations for Russia. However, it may be difficult for the U.S. government to obtain the required non-transfer assurances from the Russian government to complete the processing of specific authorizations for Russia. So, in effect, specific authorizations for Russia may not move forward in the near term.

* * * *

These changes to export licensing policy accompany the U.S. government’s imposition of targeted sanctions against certain Russian government officials and members of what the U.S. Treasury Department described as Russian President Vladimir Putin’s “inner circle,” as well as Bank Rossiya, which handles the personal funds of Russian officials. As previously reported, the United Kingdom government has suspended all existing licenses and application processing for licenses for direct export to Russia of military and dual-use items destined for units of Russian armed forces or similar state agencies. Where there is a clear risk that the end product will be used against Ukraine, the UK has suspended licenses for exports to third countries for incorporation into equipment for export to Russia.