The US Commerce Department’s Bureau of Industry and Security (“BIS”) announced that it is issuing a new License Exception MED that in many cases will eliminate BIS licensing requirements for EAR99 medical devices shipped to and within Russia, Belarus, Crimea, Donetsk People’s Republic (“DNR”), and Luhansk People’s Republic (“LNR”). License Exception MED will go into effect on Monday, April 29.
License Exception MED will authorize the export, reexport, and in-country transfer of EAR99 medical devices and parts, components, accessories, and attachments that are “exclusively” for use in or with such medical devices (“covered medical items”) to or within the aforementioned jurisdictions without a license, provided that certain conditions are met.
License Exception MED includes the following key limitations and conditions:
- Proscribed Persons: Covered medical items may not be provided to “proscribed persons,” including Entity List parties, parties on the Military End-User List or that otherwise meet the definition of “military end-user,” or other BIS restricted parties.
- Production: Covered medical items may not be supplied to a “production” facility or with knowledge or reason to know that the device is intended to develop or produce items. BIS has indicated that one purpose of this limitation is to prevent License Exception MED from being used to support the Russian industrial base.
- Verification: Parties are required maintain a system of distribution that ensures that items shipped under License Exception MED are not delivered to “proscribed person” or entities engaged in the “production” of any product. BIS has indicated that this may entail obtaining certain information from consignees (e.g., obtaining affirmations or other documentation from a consignee, or performing periodic on-site spot-checks) but has not provided detailed guidance on its expectations. There is a five-year recordkeeping requirement for these required verification measures.
License Exception MED is available to overcome the BIS licensing requirements set out in 15 CFR 15 CFR 746.5 and 15 CFR 746.10, which together impose licensing requirements for many medical device-related items identified in Supplements No. 4, No. 5, and No. 6 to Part 746 of the EAR. It is also available to overcome the licensing requirements set out in 15 CFR 746.6, which impose licensing requirements for most items sent to Crimea, the DNR, and the LNR. BIS has indicated that it expects License Exception MED to lead to almost 4,000 fewer license applications being submitted to BIS annually.
