The following provides an update on recent significant developments affecting the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR) and the U.S. embargoes and sanctions programs.
1. ITAR – Russia Designated as a Proscribed Country
Effective March 18, 2021, the Directorate of Defense Trade Controls (DDTC) added Russia to the list of proscribed countries in Section 126.1(d)(2) of the ITAR. Accordingly, applications for DDTC authorization to engage in ITAR-related activities with Russia (i.e., exports, reexports, transfers, temporary imports/exports/reexports, and brokering) are subject to a policy of denial. The only exceptions are as follows:
- License applications for exports and reexports of defense articles and defense services to Russia that support government cooperation efforts are subject to a case-by-case review; and,
- License applications for exports and reexports of defense articles and defense services to Russia in support of commercial space launches are subject to a case-by-review for a period of six (6) months).
Exporters can still utilize the license exemptions in Section 126.4(a)(2) and (b)(2) for exports to Russia when in furtherance of government space cooperation efforts.
2. ITAR – Maximum Civil Penalty Increase
As of February 2, 2021, the maximum civil penalty that may be imposed for violations of the Arms Export Control Act (AECA) and the ITAR was increased to $1,197,728 per violation.
3. EAR – New Restrictions on Exports and Reexports to Russia
As noted above, the Secretary of State determined that Russia used chemical weapons against its own people in violation of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991. Accordingly, effective March 18, 2021, the Bureau of Industry and Security (BIS) implemented a prohibition on exports and reexports to Russia of National Security-controlled goods and technology that are subject to the EAR. Exceptions to the new prohibition were made for exports and reexports of National Security-controlled items to Russia under the following license exceptions: TMP; GOV; BAG; AVS and ENC. In addition, license applications for the export and reexport of National Security-controlled items are subject to the licensing policy that was in effect prior to the new prohibitions for the following items:
- Items necessary for safety of the flight of civil fixed-wing passenger aviation;
- Deemed exports to Russian nationals;
- Exports to wholly owned U.S. subs and other foreign subs of U.S. companies in Russia;
- Items in support of government space cooperation; and,
- Items in support of commercial launch activities (until September 1, 2021).
4. EAR – New Restrictions on Burmese Military Forces
In response to the military coup in Burma, BIS implemented a more restrictive licensing policy for applications to export, reexport and transfer items to Burma. Specifically, effective February 17, 2021, license applications are subject to a presumption of denial when they involve exports and reexports of items that trigger license requirements to Burma’s Ministry of Defence, Ministry of Home Affairs, armed forces and security services. BIS also removed Burma from Country Group B and placed it into Country Group D:1, as well as suspended the use of the following license exceptions for Burma: LVS; GBS; TSR; and, APP. In addition, BIS subjected Burma to the EAR’s military end-use and military end-user rules that currently apply to Russia, Venezuela and China, such that license applications to export certain items to military end-users or for military end-uses in Burma are now subject to a presumption of denial. Further, BIS added Burma’s Ministry of Defence, Ministry of Home Affairs, Myanmar Economic Corporation, and Myanmar Economic Holding, Ltd. to the Entity List.
5. OFAC – Recent Additions to the Specially Designated Nationals List
OFAC recently added certain individuals and entities in Burma to the Specially Designated Nationals List (SDN List) for their role in the repression of pro-democracy protests by the Burmese military forces. OFAC also recently added certain Chinese government officials to the SDN List for serious human rights abuses in Xinjiang.