2021 Export and Sanctions Review
As we get into 2022 (what happened to 2021?), it is important to stay alert to the ever-shifting sands of U.S. country policy actions. Below we offer an overview of some of the major country policy actions the government implemented last year, organized by agency and listed in alphabetical order. Of course, the below is a summary only of changes in 2021. Practitioners and export control fanatics should frequently check with the respective agency websites for current country policies.
Department of State
CAMBODIA - And, to round out the year, DDTC published a final rule amending ITAR §126.1 to add Cambodia to the list of countries for which it is the policy of the United States to deny all licenses or other approvals to export and import defense articles and defense services, with certain exceptions.
- DDTC updated its “Country Policies” webpage to provide details on the “Canadian exemption
,” including updated information on key Canadian partners, Canada’s Controlled Goods Program, a Canadian exemption user guide, and FAQs.
ETHIOPIA - DDTC published an ITAR amendment which added Ethiopia to ITAR § 126.1(n) and updated the entry for Eritrea at §126.1(h).
REPUBLIC OF CYPRUS - DDTC extended the effective period of the temporary modification allowing the temporary removal of prohibitions on exports, reexports, retransfers, and temporary imports of non-lethal defense articles and defense services destined for or originating in the Republic of Cyprus through September 30, 2022, unless modified.
RUSSIA - The Department of State, Directorate of Defense Trade Controls (DDTC) amended ITAR § 126.1 to include Russia in the list of countries subject to a policy of denial for exports of defense articles and defense services, with certain exceptions. An updated information was added to DDTC’s website in April including a factsheet and new FAQs.
The Department of Commerce
BURMA - BIS limited exports and reexports of sensitive goods to Burma’s military and security services, including issuing a policy of presumption of denial of items requiring a license for export and reexport to Burma’s Ministry of Defense, Ministry of Home Affairs, armed forces, and security services. Burma was removed from Country Group B to the more restrictive Country Group D:1; added to the countries subject to the national security licensing policy for certain military end uses and end users, and to the ‘military end use’ and ‘military end user’ restrictions; and moved Burma from Computer Tier 1 to the more restrictive Computer Tier 3 in the (Computers) (APP) license exception. BIS also suspended the use of certain other license exceptions that would otherwise generally be available to Burma.
CAMBODIA - BIS amended the EAR to apply more restrictive treatment to exports and reexports to, and transfers within, Cambodia. As a result, the Country Group designation for Cambodia was updated to reflect the country’s identification by the State Department as subject to a United States arms embargo.
RUSSIA - BIS suspended the use of license exceptions for national security-controlled items destined for Russia and is not reviewing most license applications for exports or reexports of national security-controlled items destined for Russia under a presumption of denial.
SUDAN - The Department of Commerce, Bureau of Industry and Security (BIS) implemented the rescission of Sudan’s designation as a State Sponsor of Terrorism (SSOT) thus removing Anti-Terrorism (AT) controls on the country and removing it from Country Group E:1 (Terrorist supporting countries) and placing it in Country Group B. These actions mad Sudan eligible for a general 25 percent de minimis level.
Office of Foreign Asset Controls (OFAC)
BURMA - OFAC also published Burma Sanctions Regulations in response to the military overthrow of the democratically elected civilian government of Burma.
HONG KONG - OFAC published regulations to implement Hong Kong-related sanctions in response to the President’s determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to the People’s Republic of China. OFAC later published updated FAQs and the Risks and Considerations for Businesses Operating in Hong Kong business advisory.
SYRIA - A final rule amending the Syrian Sanctions Regulations was adopted to expand the existing general license to authorize NGOs to engage in certain assistance- related investment activities in support of certain not-for-profit activities in Syria.
Stay tuned for an upcoming alert that will recap some important regulatory changes made in 2021 and those already rolling out in 2022.