On June 2, 2022, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) added additional Russian and Belarussian entities to the BIS Entity List, enacted new licensing requirements for food, medicine for military end-users on the Entity List, and stated that they would be making charging letters public in a pair of Final Rules (here and here). We have outlined these developments in additional detail below.
Additions of Russian and Belarusian Entities to BIS Entity List
BIS added an additional 70 Russian and one Belarussian entity to the BIS Entity List under the Export Administration Regulations (“EAR”). Of these, 66 have been designated as military end users under section 744.21 of the EAR and are subject to a license requirement for exports, reexports and transfers (in-country) of all items subject to the EAR, including items caught under the Russia/Belarus foreign direct product rule in section 734.9(g) of the EAR.
New License Requirement for Food, Medicine for Russian/Belarussian Military End Users on the Entity List
BIS has eliminated a prior exemption for EAR99 food and medicine when destined for Russian/Belarussian military end users on the BIS Entity List. Such food and medicine export, reexports and transfers now require a license from BIS and are subject to case-by-case review, unless for the Foreign Intelligence Service (SVR), Federal Security Service (FSB) or the Main Intelligence Directorate, which are now subject to a policy of denial. BIS indicated that the action was taken because food and medicine may contribute to the sustainment and reconstitution of Russian forces, and that the change is not meant to impact deliveries for the use and benefit of the people of Russia, Crimea, or the embargoed Donetsk People’s Republic or Luhansk People’s Republic.
Publication of Charging Letters in Administrative Enforcement Proceedings
As anticipated by recent comments from BIS officials, BIS announced a change in policy to publicize charging letters at an earlier stage, prior to final disposition by an Administrative Law Judge. The stated purpose of this change is to enhance BIS’s transparency efforts and educate the exporting community in order to support their ability to use such information in developing their compliance programs. BIS has indicated that pre-charging letters will not be made public.
Other EAR Changes
BIS also implemented other corrections, clarifications, and conforming changes to the EAR, including changes and technical updates relating to license review policies for civil telecommunications infrastructure, the Russian Industry Sector Sanctions List of Schedule B numbers, and the value of certain clothing and shoe entries subject to the luxury goods ban.