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US Commerce Department Issues New Rules to Coordinate Export Controls and Trade with Allies

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On December 7, 2023, the United States Commerce Department’s Bureau of Industry and Security (“BIS”) issued three new rules as a broad effort to ease export control requirements under the Export Administration Regulations (“EAR”) for key allied and partner countries.  These rules were enacted in order to reduce the licensing requirement to export, reexport, and transfer US goods, software, and technology to and between allies and partners of the United States.

The new rules are as follows:

  1. Rule one eliminates the licensing requirement for the export, reexport, and/or transfer to and/or within countries identified in the Australia Group (a complete list of such countries can be found here) of pathogens and toxins and their related technologies controlled under Export Control Classification Numbers (“ECCNs”) 1C351, 1C353, 1C354, 1E001, and 1E351 of the Commerce Control List (“CCL”), with the exception of ricin and saxitoxin and related items. 

    This rule also removes crime control licensing requirements for exports/reexports/transfers to Austria, Finland, Ireland, Liechtenstein, South Korea, Sweden, and Switzerland.
  2. Rule two expands license exception eligibility to additional countries for certain missile technology items as outlined by the Missile Technology Control Regime (“MTCR”) Annex of the EAR.  This rule also makes certain amendments to ECCNs 1C111, 2A101, 2B119, 6A107, 9A101, and 9E515 of the CCL, primarily consisting of editorial corrections to these ECCNs to align with the MTCR Annex.  BIS does not expect these amendments to have a substantial impact on the number of export control license applications received by BIS annually.
  3. Rule three proposes revisions to the License Exception Strategic Trade Authorization (“STA”), including eligibility of use of STA for ECCNs 1E001 and 2E003.f, and seeks public comment on ways to facilitate use of STA, including clarification on which items are eligible for STA to certain countries.  The rule also proposes a number of changes intended to increase the usage of STA in an effort to mitigate burdens imposed on exporters, reexporters, and transferors.

For more information on these rules, please contact a member of our Trade team.

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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

Taylor Parker is an associate at Baker McKenzie's Chicago office and a member of the International Commercial group. Taylor leverages her background in governmental affairs, public health and the private business sector to provide global clients with coordinated solutions to international transactions and issues. Taylor advises clients on various international commercial matters, including domestic and cross-border mergers and acquisitions, economic and trade sanctions, export controls, and customs and import laws.

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