BIS issues new rule restricting transactions involving military

2023-03-12 04:03| 来源: 网络整理| 查看: 265

On 15 January 2021, BIS published an interim final rule, effective 21 March 2021, imposing additional license requirements under the Export Administration Regulations (EAR) for exports, reexports, in-country transfers, and certain activities of U.S. persons in connection with certain “military-intelligence end uses” and “military-intelligence end-users” in China, Russia, Venezuela, or a country listed in Country Group E:1 or E:2 (the MIEU Rule). Notably this rule applies to certain transactions involving items that are not subject to the EAR, which is broader than the military end user rule implemented in June 2020 (the MEU Rule).

In effect, the MIEU rule creates a tier of military end-users involved in intelligence activities that are subject to even stricter licensing requirements than military end uses or end-users.

Because the rule is not in effect yet, it will likely undergo review by the Biden Administration pursuant to the regulatory freeze directive issued on 20 January, which asks agencies to postpone the effective dates of rules that have already been published in the Federal Register, or rules that have been issued but have not taken effect, to 60 days from 20 January.

Restricted transactions

The new rule expands the existing provisions in the EAR prohibiting the export, reexport, or transfer of items subject to the EAR for certain prohibited end-uses. Previously, the EAR already prohibited the export, reexport, or transfer of items subject to the EAR with knowledge that such items will be used directly or indirectly in certain nuclear, missile, chemical, and biological weapons end uses. The rule make two key changes:

First, the new MIEU rule prohibits foreign or U.S. persons, without a license, from exporting, reexporting, or transferring items all subject to the EAR with knowledge that the items are intended, entirely or in part, for a “military-intelligence end use” or “military-intelligence end user.” These restrictions are broader than those applicable to “military end users” or “military end uses,” which only impose a licensing requirement for items subject to the EAR that are set forth in Supp. No. 2 to the EAR, not all items subject to the EAR. Second, the rule prohibits U.S. Persons from providing “support” to military-intelligence end uses or military-intelligence end users in subject countries without a license, even when there is no item subject to the EAR involved. BIS defines “support” broadly to include: Shipping or transmitting from one foreign country to another foreign country any item not subject to the EAR with knowledge such items will be used in or by a military-intelligence end use or military-intelligence end user, including the sending or taking of such item to or from foreign countries in any manner. Transferring (in-country) any item not subject to the EAR with knowledge such items will be used in or by any military-intelligence end use or military-intelligence end user. Facilitating such shipment, transmission, or transfer (in-country). Performing any contract, service, or employment with knowledge that such performance may assist or benefit any military-intelligence end use or military-intelligence end user, including, but not limited to: Ordering, buying, removing, concealing, storing, using, selling, loaning, disposing, servicing, financing, transporting, freight forwarding, or conducting negotiations in furtherance of. What is a military-intelligence end use?

In a newly added Part 744.22 of the EAR, a “military-intelligence end use” includes the design, development, production, use, operation, installation (including on-site installation), maintenance (checking), repair, overhaul, refurbishing of, or incorporation into, items described on the U.S. Munitions List (USML) or classified under ECCNs ending in “A018” or under “600 series” ECCNs, which are intended to support the actions or functions of a military-intelligence end user.

Who is a military-intelligence end user?

The MIEU rule revises the definition of “military end user” in § 744.21 of the EAR to mean the “national armed services (army, navy, marine, air force, or coast guard), as well as the national guard and national police, government intelligence or reconnaissance organizations (excluding those described in § 744.22(f)(2) of the EAR), or any person or entity whose actions or functions are intended to support ‘military end uses.’” Military-intelligence end users are therefore excluded from the scope of the MEU rule, which applies only to items described in Supplement No. 2 to Part 744 of the EAR, and are subject to the broader restrictions described above.

Under the MIEU rule “military-intelligence end user” means any intelligence or reconnaissance organization of the armed services (army, navy, marine, air force, or coast guard); or national guard. BIS provided an illustrative list but not exhaustive list (to be codified in § 744.22) of military-intelligence end users. U.S. exporters must conduct due diligence on other non-listed parties in China, Russia, Venezuela, or BIS Country Group E:1 or E:2 countries to confirm they are not military-intelligence end users. The BIS list as set forth in the interim rule consists of the following entities:

Directorate of Military Intelligence (DIM) and Director of Military Counterintelligence (CIM) in Cuba Intelligence Bureau of the Joint Staff Department in China Islamic Revolutionary Guard Corps Intelligence Organizations (IRGC-IO) and Artesh Directorate for Intelligence (J2) in Iran Reconnaissance General Bureau (RGB) in North Korea Main Intelligence Directorate (GRU) in Russia Military Intelligence Service in Syria General Directorate of Military Counterintelligence (DGCIM) in Venezuela

In addition, BIS may inform an exporter individually by specific notice or through amendments to the EAR that a license is required for exports, reexports, or transfers of items subject to the EAR due to an “unacceptable risk” of use in or diversion to a military-intelligence end use or military-intelligence end user in a subject country.

Next steps

Comments on the rule must be filed before 1 March 2021. For further information or assistance regarding transactions potentially subject to the new MIEU rule, please contact the Hogan Lovells International Trade and Investment team.

Authored by Cayla Ebert, Adam Berry, Ajay Kuntamukkala, Beth Peters, Deborah Wei

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