Easing of Syria Export Controls Still Leaves Some Hurdles, Law Firm Says
Although the Bureau of Industry and Security published a rule last month to ease certain export controls on Syria (see 2508280029), it also “retained significant parts” of its long-standing restrictions against the country, which could create new compliance challenges for some exporters, Troutman Pepper said in a client alert.
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The BIS rule includes a new license exception that authorizes exports and reexports to Syria of all items classified under the Export Administration Regulations as EAR99, except for certain restricted end users and end uses, making a range of transactions eligible for export to Syria without a specific license. But Troutman Pepper noted that this “structure remains more cumbersome and complex than simply removing the broad underlying licensing requirement” for Syria, which is still in place. Syria also remains in Country Group E:1 of the EAR alongside North Korea and Iran, the firm said, so exporters are required to submit filings in the Automated Export System for all exports from the U.S., “among other impacts.”
In addition, although BIS has created a “much more favorable” license review policy for Syria -- meaning that licenses for the country likely “can be obtained in most cases” -- Troutman noted that BIS is facing a significant licensing backlog and delays. The firm also said BIS can still deny a license application if it has “doubts” about the end use and end users, stressing that applicants should “provide as much information as they can about the limited utility of what they are seeking to provide, and/or controls in place around unauthorized diversion.”
Troutman Pepper said any “lack of clarity or potential concern around a particular license request (e.g., unknown or problematic end users, inadequate controls around diversion, etc.) is likely to lead to significant delays and potential denial.” Exporters seeking a license “should be thorough and thoughtful about drafting the request in a way that will satisfy the U.S. government.”