On July 31, 2020, the Department of Commerce Bureau of Industry and Security (“BIS”) amended the Export Administration Regulations (“EAR”) to suspend the availability of all License Exceptions for Hong Kong that provide differential treatment relative to mainland China. Our blog post on prior steps taken to revoke preferential treatment for Hong Kong, including the initial announcement of these suspensions, is available here.

The following partial or full License Exceptions are no longer available for exports and reexports to Hong Kong, and transfers within Hong Kong, of all items subject to the EAR:

  1. Shipments of Limited Value (LVS) (§ 740.3);
  2. Shipments to Group B Countries (GBS) (§ 740.4);
  3. Technology and Software under Restriction (TSR) (§ 740.6);
  4. Computers, Tier 1 only (APP) (§ 740.7(c));
  5. Temporary Imports, Exports, Reexports, and Transfers (in-country) (TMP) (§ 740.9(a)(11), (b)(2)(ii)(C, and (b)(5));
  6. Servicing and Replacement Parts and Equipment (RPL) (§ 740.10(a)(3)(viii), (a)(4), (b)(1) except as permitted to Country Group D:5, and (b)(3)(i)(F) and (ii)(C));
  7. Governments (GOV) (§ 740.11(c)(1)—Cooperating Governments only));
  8. Gift Parcels and Humanitarian Donations (GFT) (§ 740.12);
  9. Technology and Software Unrestricted (TSU) (§ 740.13);
  10. Baggage (BAG) (§ 740.14) (except as permitted by § 740.14(d));
  11. Aircraft, Vessels, and Spacecraft (AVS) (§ 740.15(b)(1), (b)(2), (c));
  12. Additional Permissive Reexports (APR) (§ 740.16(a) and (j)); and
  13. Strategic Trade Authorization (STA) (§ 740.20(c)(2)).

In addition, reexports of items subject to the EAR from Hong Kong under License Exception APR § 740.16(a) are also restricted. The EAR’s Country Groups have not changed, and Hong Kong remains in the same groups as before. The suspension of the license exceptions has been implemented by adding a provision to the restrictions on all license exceptions in 15 C.F.R. Part 740.2.

Author

Ms. Contini focuses her practice on export controls, trade sanctions, and anti-boycott laws. This includes advising US and multinational companies on trade compliance programs, risk assessments, licensing, review of proposed transactions and enforcement matters. Ms. Contini works regularly with companies across a wide range of industries, including the pharmaceutical/medical device, oil and gas, and nuclear sectors.

Author

Ms. Test advices clients on issues relating to licensing, regulatory interpretations, enforcement actions, internal investigations and compliance audits, as well as the design, implementation and administration of compliance programs. She also advises clients on the extra-territorial application of trade compliance-related regulations in cross-border transactions.

Author

Daniel Andreeff’s practice focuses on US economic and trade sanctions, including those targeting Iran, Russia, Cuba, Syria, and North Korea, export controls, and anti-boycott laws. He represents clients in national security reviews before the Committee on Foreign Investment in the United States (CFIUS), and has experience in federal court litigation and congressional investigations. His pro bono practice includes providing sanctions and export control advice to a global humanitarian NGO. * Admitted in New York only. Practice in the District of Columbia is under the supervision of a member of the District of Columbia Bar.