Expanded End -User and End-Use Based Export Controls

Aug. 5, 2024
By: Marvin E. McPherson

BIS published a proposed rule which expands restriction on U.S. Persons’ activities and adds end use/user controls for foreign-security end users. The proposed rules are released in concert with conforming changes to the DDTC’s rule relating to revisions to Definition and Controls Related to Defense Services . BIS emphasizes that these changes do not overlap with the controls set forth under the ITAR or do not restrict activities not subject to the EAR.

The proposed rule expands restrictions on U.S. persons activity in connection with `foreign-security end users and military end uses and end users. Specifically, this proposed rule would revise § 744.6(b) (General prohibitionsNo U.S. person may, without a license from BIS, support) of the EAR to include U.S. person activities in support foreign-security end users. The activities as defined by “support” in §744.6(b) remain the same. This includes under certain end use/user conditions facilitating shipments, transmission, transfer (in-country), performing any contract, service, or employment.

In addition to expanded activity controls the proposed rule adds restrictions for all items subject to the EAR when destined to military end uses and end users. This includes armed forces or national guard of countries subjected to a U.S. arms embargo, as well as civilian or military intelligence agencies (i.e., intelligence end users) of over 40 countries of concern.

The license requirement would apply to any exporter with knowledge that that a CCL item is intended, entirely or in part, for foreign-security end users. The proposed definition of foreign-security end users is a “governmental and other entities with the authority to arrest, detain, monitor, search, or use force in the furtherance of their official duties.” This definition would include persons or entities at all levels of the government police and security services, from the national headquarters or the ministry level to all subordinate agencies/bureaus as well as non-governmental entities acting in the same capacity.

BIS is inviting public comments for the proposed amendment, which are due September 27, 2024.

Ensuring the proper review of end use and end users ensures compliance with the EAR regulations. If your company needs assistance to navigate the complexities of new end use or user restrictions, please contact any attorney at Barnes Richardson and Colburn.