Regulatory intelligence for US exporters

BIS Issues New Russia Export Controls, Clarifications

The Bureau of Industry and Security this week expanded its export controls against Russia and Belarus to cover a broader range of items and Harmonized System codes, including more industrial materials and aircraft parts. The agency also added new controls to better restrict exports used in Iran’s drone production, revised the de minimis treatment for certain military and spacecraft-related items, added a new license requirement exclusion and more.

The changes, outlined in a final rule effective Jan. 23, will help the U.S. better align its Russia and Belarus export controls with its allies, BIS said in a news release. “Export controls are more durable and effective when imposed on a multilateral basis, and today’s rule better aligns U.S. controls with the stringent measures implemented by our allies and partners,” said Thea Kendler, the agency's assistant secretary for export administration.

The rule expands the scope of the Export Administration Regulations’ Russian and Belarusian Industry Sector Sanctions by adding more than 90 six-digit HS codes to the list of items that need an export license, BIS said. Those items now include more chemicals, lubricants and metals along with the entire HS Chapter 88, which covers certain aircraft, spacecraft and related parts. The Harmonized Tariff Schedule of the U.S. and the international HS nomenclature are the same up to the six-digit level.

The new controls build off Russia-related restrictions announced by BIS in May, which introduced new controls on HS chapters 84, 85 and 90 (see 2305190059). BIS this week said it wanted to also cover HS Chapter 88 because of “significant overlap” between items in that chapter and items controlled under Category 9 of the Commerce Control List.

“BIS believes that adding controls to all of chapter 88 will more closely align U.S. controls with those of U.S. allies, who generally impose aviation controls on Russia through reference to Chapter 88,” the agency said. It also hopes this will make sure any items listed in Chapter 88 but “not enumerated or otherwise specified” on the CCL are subject to license requirements.

“Through such comprehensive controls, BIS intends to cut further off Russia’s access to items of potential military significance and expand the economic impact of controls that will deny Russia additional resources it needs to continue waging war,” BIS said.

The agency said it’s expecting these changes to lead to 25 more license applications submitted to BIS annually.

BIS also added new six-digit HS subheading 8529.10 -- which includes antennas, antenna reflectors and their parts -- to the scope of certain items that need an export license for Iran, Russia, Belarus and the Crimea region of Ukraine, including when used by Iran to produce unmanned drones (see 2302240028). This control is meant to “further undermine” Iranian drone shipments and other support to the Russian and Belarusian military, BIS said. The agency is expecting to receive about five more licenses annually from this restriction.

Another change removes the “lowest-level military and spacecraft-related items” from being eligible for de minimis treatment when they are incorporated into a foreign-made item that will be exported abroad to Russia or Belarus. The rule specifically removes the de minimis level for U.S.-origin “600 series” items, which includes certain defense items that were previously controlled under the State Department’s U.S. Munitions List.

Adding Belarus and Russia to this de minimis restriction “will bring additional foreign-made military and spacecraft items within the scope of the EAR,” BIS said, “and put additional pressure on Russia’s military and defense industrial base, as well as make it more difficult for foreign suppliers to provide even low-level military and spacecraft items to Belarus and Russia.”

Although the U.S. already imposes certain export license requirements on these items, BIS said removing their de minimis eligibility “makes the EAR’s Russia and Belarus controls stronger, more far reaching, and more effective.” The agency is expecting another five license applications annually from this change.

Another change adds a new license requirement exclusion for certain transactions involving the Ukrainian military within Crimea and Ukraine. This change is meant to help Ukraine make “deployments more efficient and effective.”

BIS also said it will allow exporters to temporarily import firearms they had previously sent to Ukraine so those weapons can be serviced or repaired and sent back. Those firearms can be temporarily imported under License Exception RPL (Replacement of Parts and Equipment) as long as they were originally exported under a BIS license, the agency said.

BIS said it has received questions on this item and plans to soon address it by updating guidance on its website with a frequently asked question. That FAQ, which is included in the rule, covers a company that exported 500 firearms to Ukraine using a BIS license in 2022 but now needs to temporarily return 50 of them to the U.S. for repair. BIS said those returns would be allowed.

BIS also made several other corrections and technical revisions to its Russia and Belarus controls, including by clarifying the export control scope of certain fasteners and medicine; adopting a case-by-case license review policy for certain license applications involving flight safety; clarifying how exporters should treat items controlled to Russia or Belarus by more than one section of the EAR; and more.

All exports that now require a license as a result of these changes that were aboard a carrier to a port as of Jan. 23 may proceed to their destinations under the previous eligibility without a license as long as the export “is completed” by Feb. 22.