On May 9, 2022, the US Department of Commerce issued a Final Rule (the “Final Rule”) expanding the Russian industry sector sanctions to cover additional items subject to the Export Administration Regulations (the “EAR”) beyond restrictions targeting the Russian energy sector.
Under the Russia industry sector sanctions, all items identified in Supplement No. 4 to part 746 of the EAR (“Supplement No. 4”) that are subject to the EAR trigger a licensing requirement when they are exported, reexported, or transferred (in-country) to or within Russia. The items in Supplement No. 4 are classified as EAR99 and would not otherwise require authorization for export, reexport, or transfer to or within Russia.
A list of the categories of items covered under the expanded Supplement No. 4 is available here, and the expanded controls are effective on May 9, 2022. License applications for items subject to these sanctions are reviewed under a policy of denial except when they are for items that may be necessary for health and safety reasons, which are reviewed under a case-by-case license review policy. The Final Rule also adds an additional case-by-case license review policy when a license application is made for items that meet humanitarian needs.
In addition, the Final Rule clarifies that only the items identified in the HTS Description column of Supplement No. 4 are subject to the licensing requirement imposed under the Russian industry sector sanctions. Furthermore, the accompanying HTS Code, Schedule B, and Schedule B Description columns are provided for reference and are not intended to indicate that all items classified under those HTS Codes or Schedule B numbers are subject to the additional licensing requirement.
Finally, the Final Rule also includes a “savings clause” for shipments of items being added to Supplement No. 4 by the Final Rule that are being removed from eligibility for a license exception or for export, reexport, or transfer (in-country) without a license. Specifically, such shipments that were en route pursuant to an actual order to or within a non-US destination on May 9, 2022 may proceed to that destination under their prior eligibility.