On May 24, 2019, the US Commerce Department’s Bureau of Industry and Security (“BIS”) issued a final rule amending the Export Administration Regulations (“EAR”) to (i) remove Venezuela from Country Group B, which affords favorable treatment for certain exports of national security-controlled items, and (ii) add Venezuela to Country Group D:1, which includes countries of national security concern, and to Country Groups D:2, D:3, and D:4, which include countries of nuclear, chemical and biological weapons, and missile technology concern, respectively. BIS also made other conforming changes to the EAR, including adding (i) nonproliferation column 2 (NP 2) and (ii) chemical and biological weapons column 3 (CB 3) reasons for control for Venezuela. Venezuela had previously been part of Country Group D:5 as a US arms embargoed country, meaning that exports and reexports to Venezuela for items classified under 9×515 and “600 series” ECCNs were already subject to a policy of denial, and Venezuela has been included in the military end-use and end-user control in Section 744.21 of the EAR. BIS noted that the final rule better protects US national security and better aligns the Country Group designations for Venezuela with other EAR national security-related provisions that already apply to Venezuela.
The US Government has taken coordinated actions this week that target Huawei Technologies Co. Ltd (“Huawei”), effectively cutting it off from sourcing US products and technology and likely barring its products from being used in US communications infrastructure and networks. The US export/reexport restrictions targeting Huawei took effect immediately on May 16, 2019. The expected prohibition on the use of Huawei products in US communications infrastructure is likely to take several months to implement.
On May 8, 2019, President Trump issued Executive Order 13871 (the “Iran Metals EO”) imposing sanctions on the iron, steel, aluminum, and cooper sectors of Iran subject to a 90-day wind-down period that will expire on August 6, 2019. Although the sale, supply or transfer to/from Iran of steel and aluminum is already targeted by Section 1245 of the Iran Freedom and Counter-Proliferation Act of 2012, the Iran Metals EO expands upon those sanctions and further targets the Iranian iron and copper sectors.
On April 22, 2019, the Trump Administration announced that the US government will not reissue the significant reduction exceptions (“SREs”) that have allowed energy companies in China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey to purchase Iranian oil without being subject to relevant US sanctions. The current waivers will expire on May 2, 2019.