Export Control Regulatory Change Summary, January – March 2021

Changes reflect decisions adopted at the November 2019 Chemical Weapons Convention Conference of the States Parties. The Chemical Weapons Convention from 1997, is an international arms control treaty whose purpose is to eliminate an entire category of weapons of mass destruction by prohibiting the development, production, acquisition, stockpiling, retention, transfer or use of chemical weapons by States Parties.

This change adds three chemical families and one chemical and revises the definition of “production” of Chemical Weapons Convention chemicals.

This change clarifies controls on vaccines under Export Control Classification Number (ECCN) 1C991. ECCN 1C991.a now clearly indicates that it controls all vaccines that “contain” items controlled by ECCN 1C351, 1C353 or 1C354, as well as those vaccines that are designed for use “against” these items.

For example, COVID vaccines containing genetic elements of items controlled by ECCN 1C353 (such as a common vector for vaccine development vesicular stomatitis virus VSV) are now controlled under ECCN 1C991, instead of ECCN 1C353. Consequently, instead of requiring a license for export or reexport to all destinations, a license is required only to a much more limited number of destinations (i.e., countries of concern for anti-terrorism (AT) reasons).

The rule also made changes to two definitions in the “Related Definitions” paragraph under the List of Items Controlled for ECCN 1C991 for `medical products’ and `immunotoxins’ under 1C991 and 1C351.

Changes are based on a decision of the Australia Group June 2019 Plenary meeting. The Australia Group is a multilateral forum for the harmonization of export controls related to chemical and biological weapons.

This change adds Sudan to Country Group B and removes Sudan from Country Group E:1 (terrorist supporting countries) and Anti-Terrorism (AT) controls.

Sudan remains subject to an arms embargo, under ITAR §126.1(v) and EAR Country Group D:5.

Commerce extended the control of Software Specially Designed to Automate the Analysis of Geospatial Imagery under ECCN 0D521 for one year.

BIS notes that the 0Y521 series of ECCNs is a temporary holding classification that only lasts for one year unless it is extended and the U.S. government submits a proposal for export control to the relevant multilateral regime(s) to obtain multilateral controls over the item.

The Department of State published an update to its Cuba Restricted List. Persons subject to U.S. jurisdiction are generally prohibited from direct financial transactions with these entities under the Cuban Assets Control Regulations (CACR). The Department of Commerce’s Bureau of Industry and Security (BIS) generally will deny applications to export or reexport items for use by entities or subentities on the Cuba Restricted List.

Executive Order 14014 designated two individuals and four entities under the Burma-related sanctions.

• Seventh Sense Creation;
• A&M Mahar Company Ltd.;
• Sky One Construction Company Ltd.;
• The Yangon Gallery;
• Daw Khin Thiri Thet Mon; and
• Aung Pyae Sone

In response to the military coup in Burma, effective immediately, BIS applied a presumption of denial for items subject to the EAR requiring a license for export or reexport when destined to Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security services. And suspension of certain license exceptions.

The Department of State added six entities to the Countering America’s Adversaries Through Sanctions Act (CAATSA) Section 231 List of Specified Persons known to operate for or on behalf of the Russian defense or intelligence sectors.

Section 231 of the CAATSA was enacted on August 2, 2017. See here for more information on CAATSA.

This rule implements the decision of the End User Review Committee (ERC) to add fourteen entities to the Entity List. The fourteen entities are located in Germany, Russia, and Switzerland have been added to the Entity List based on their proliferation activities in support of Russia’s weapons of mass destruction programs.

Entries on the BIS Entity list are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. In many cases that means a license requirement for exports of all items subject to the EAR.

Entity List under this notice:

Germany

• Chimconnect Gmbh
• Pharmcontract Gmbh
• Riol-Chemie

Russia

• 27th Scientific Center of the Russian Ministry of Defense
• Chimmed Group
• Femteco
• Interlab
• LabInvest
• OOO Analit Products
• OOO Intertech Instruments
• Pharmcontract GC
• Rau Farm
• Regionsnab

Switzerland

• Chimconnect AG

In response to the military coup in Burma, this rule:

1. adds Burma to the countries subject to the ‘military end use’ and ‘military end user’ restrictions (MEU) in § 744.21 of the EAR, joining China, Russia and Venezuela.  This triggers license requirements for items identified in Supplement No. 2 to Part 744 if they are intended for a military end use or military end user, as each of those terms are broadly defined in § 744.21;
2. moves Burma from Country Group B to Country Group D:1; which reduces the availability of license exceptions for exports, reexports, and in-country transfers; and
3. moves Burma from Computer Tier 1 to the more restrictive Computer Tier 3 in the (Computers) (APP) license exception.

This rule adds 4 entities to the Entity List. Entries on the BIS Entity list are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. In many cases that means a license requirement for exports of all items subject to the EAR.

Additions to the Entity List under this notice:

Burma

• Ministry of Defence;
• Ministry of Home Affairs;
• Myanmar Economic Corporation; and
• Myanmar Economic Holdings Limited.

This rule:

• Adds 744.22 to the EAR, which imposes license requirements on all items subject to the EAR to military-intelligence end uses and end users in China, Russia, or Venezuela; and countries listed in Country Groups E:1 and E:2
• Adds 744.6(b)(5) to the EAR which indicates no “U.S. person” may, without a license from BIS, ‘support’ a ‘military-intelligence end use’ or a ‘military-intelligence end user,’ (as defined in the EAR) in the People’s Republic of China, Russia, or Venezuela; or a country listed in Country Groups E:1 or E:2
• Clarifies license requirements for certain activities of U.S. persons apply even when the items at issue are not subject to the EAR;
• Adds new paragraph (c) to § 744.11, which authorizes BIS to inform persons that a license is required for specified transactions or parties, based on risk of diversion to a listed entity;
• Expands the scope of activities subject to chemical and biological weapons and rocket systems and unmanned aerial vehicles end-use controls.

On March 1, 2021, the Secretary of State determined pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 that the Government of Russia used chemical weapons in violation of international law or lethal chemical weapons against its own nationals.  As a result, the Department added Russia to the list of countries subject to a policy of denial for exports of defense articles and defense services under to ITAR 126.1, with certain exceptions:

1. for case-by-case review of exports that support government space cooperation; and
2. for six months from the date of the Secretary of State’s determination, for case-by-case review of exports when in support of commercial space launches.

In addition, ITAR 126.1(a) was amended to allow use of the exemptions in ITAR 126.4(a)(2) and (b)(2) for exports to Russia when in furtherance of government space cooperation. 

Consistent with Note 1 to Country Group D:5 in Supplement No. 1 to part 740 of the EAR, countries included in § 126.1 of the ITAR are listed under the EAR in Country Group D:5. Based on placement in Country Group D:5 certain license exceptions are suspended for use with national security-controlled items destined for Russia, and most license applications for exports or reexports of national security-controlled items destined for Russia will be reviewed under a presumption of denial. See National Security Waiver in Federal Register Notice for exceptions.