BIS Expands Controls on Exports of Foreign Produced Items to Iran

Aug. 7, 2024
By: Ashley J. Bodden

The Bureau of Industry and Security (BIS) issued a final rule implementing an expansion of controls on export, reexport or transfer of certain foreign-produced items located in or destined to Iran. This rule comes on the heels of the No Technology for Terror Act, which was passed earlier this year in April as part of an emergency supplemental appropriations for the current fiscal year.

The expansion, which took effect July 23^rd, expands the scope of the Export Administration Regulations’ (EAR) Iran Foreign Direct Product Rule (FDPR). This rule is intended to further impede Iran’s ability to procure technology and other components critical for military systems, including advanced drones that can pose a threat to the U.S. and its allies.

The rule expands existing controls already applied to Iran under the FDPR by imposing licensing requirements for the export, reexport, and transfer (in-country) of additional foreign-produced items located in or destined to Iran. In addition, the rule also adds a new end-user scope that targets transactions involving such items in which the Government of Iran is a party.

BIS has provided a savings clause to shipments of items removed from license exception eligibility or eligibility for export, reexport or transfer (in-country) without a license as a result of this regulatory action. If the shipment of items were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on July 26, 2024, pursuant to actual orders for exports, reexports and transfers (in-country) to a foreign destination, may proceed to that destination under the previous license exception eligibility or without a license so long as they have been exported, reexported or transferred (in-country) before August 26, 2024. It is important to note that any items not actually exported, reexported or transferred (in-country)) before midnight on August 26, 2024, will require a license in accordance with the new final rule.

If you have any questions about this final rule or the evolving scope of U.S. export controls and sanctions, please do not hesitate to contact any attorney at Barnes, Richardson & Colburn.