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EAR

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On October 21, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) amended the Export Administration Regulations (“EAR”) to further restrict exports and reexports of items to Cuba (“the Amendment“).  According to BIS, the Amendment was made to further restrict the Cuban government’s access to items subject to the EAR, thereby supporting the US government’s national security and foreign policy decision to hold the Cuban regime accountable for its repression of the Cuban people and its continuing support for the Maduro regime in Venezuela.  The Amendment further implements President Trump’s June 2017 National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba.  BIS also updated Frequently Asked Questions regarding Cuba, and the US Commerce Department issued a related press release here.

The same week, Secretary of State Michael R. Pompeo wrote to the Secretary of Transportation noting the Administration’s policy and requested that the Department of Transportation (“DOT”) suspend all scheduled US carrier flights between the United States and all airports in Cuba, except José Martí International Airport (HAV) in Havana.  DOT issued an order suspending service on October 25, 2019.  US air carriers have 45 days to discontinue all scheduled air service between the United States and all airports in Cuba, except José Martí International Airport.  Please see here for the State Department’s press release.

A summary of specific changes/clarifications made by the Amendment are described below:

On October 9, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) added 28 Chinese entities to the Entity List because they are accused by the US Government of being associated with human rights violations and abuses against Uighurs, Kazakhs, and other members of Muslim minority groups in the Xinijiang Uighur Autonomous Region (“XUAR”). All exports, reexports, or in-country transfers of items (i.e., goods, software, technology) subject to the Export Administration Regulations (“EAR”), including EAR99 items, are now subject to a license requirement to such entities. The final rule also includes an extensive list of aliases for these entities.

On September 9, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) published two Frequently Asked Question (“FAQ”) documents (available here and here) on the Huawei Entity List and Temporary General License (“TGL”) and the Huawei TGL Extension (the amended TGL issued on August 21, 2019 is available here).  See our blog post on the extension of the Huawei TGL here.

The key clarifications made by BIS in the two sets of FAQs include the following:

Effective August 19, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) (i) added forty-six (46) additional non-US affiliates of Chinese-headquartered Huawei Technologies Co. Ltd. (“Huawei”) to the Entity List, and (ii) extended and modified the Temporary General License (“TGL”) authorizing certain transactions involving the export, reexport, and transfer of items subject to the Export Administration Regulations (“EAR”) to Huawei and its designated non-US affiliates.  The extended and modified TGL (“New TGL”) covers the Huawei entities added to the Entity List on May 16, 2019, as well as the ones added on August 19, 2019.  The New TGL will be effective through November 18, 2019.  As further discussed below, the New TGL (i) mitigates the impact of the Entity List designation by waiving the Entity List restrictions for certain transactions, and (ii) imposes strenuous certification requirements for the use of the New TGL.  Please see our blog post on the initial designation of Huawei and its non-US affiliates here and the original TGL here.