March 18, 2021
News from Reeves & Dola, LLP
State and Commerce Departments Restrict Exports to Russia

The Departments of State and Commerce have both announced that exports and reexports to Russia are restricted, beginning today, pursuant to the Secretary of State's determination that the Russian government violated the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 ("CBW Act") Sanctions when it used "chemical or biological weapons in violation of international law or lethal chemical or biological weapons against its own nationals.” The State Department Final Rule and the Commerce Department Notice of Implementation are published in today's Federal Register.

U.S. Department of State Final Rule

The State Department's Directorate of Defense Trade Controls ("DDTC") is amending the International Traffic in Arms Regulations ("ITAR") to include Russia in the list of countries subject to embargoes and policies of denial for exports of defense articles and defense services. This list is enumerated in 22 C.F.R. § 126.1(d)(2). Russia is now added under paragraph (l) (formerly reserved), which reads: "It is the policy of the United States to deny licenses or other approvals for exports of defense articles and defense services destined for Russia, except that a license or other approval may be issued on a case-by-case basis (1) For government space cooperation; and (2) Prior to September 1, 2021, for commercial space launches."

U.S. Department of Commerce Notice of Implementation

The Commerce Department's Bureau of Industry and Security ("BIS") will now review license applications for exports or reexports of national security-controlled ("NS") items to Russia under a presumption of denial, particularly for commercial end-users and civil end-uses in Russia and to state-owned and state-funded enterprises in Russia.

In addition, because DDTC added Russia to the list of countries in ITAR section 126.1(d)(2), Russia is now included in EAR Country Group D:5, which limits the availability of license exceptions for exports and reexports. BIS is also suspending license exceptions RPL (Service and Replacement of Parts and Equipment), TSU (Technology and Software Unrestricted), and APR (Additional Permissive Reexports) for use with any NS-controlled items destined to Russia.

There is, however, a partial waiver of these sanctions for a limited number of activities the Secretary of State has determined is essential to U.S. national security interests. For example, exports/reexports to Russia eligible for the following license exceptions: TMP (Temporary Imports, Exports, and Reexports); GOV (Governments, International Organizations, and International Inspections under the Chemical Weapons Convention); BAG (Baggage); AVS (Aircraft and Vessels); and ENC (Encryption Commodities and Software).

The waiver also covers other licensed activities, such as deemed exports/reexports to Russian nationals, exports/reexports for wholly-owned U.S. subsidiaries or other foreign subsidiaries of U.S. companies located in Russia, and exports/reexports in support of commercial or government space flight. The National Security Waiver is described in detail in the Notice.

BIS has also identified parties with ties to Russia's chemical and biological weapons program and added these parties to the Entity List.

Impact on U.S. Imports

Currently, these sanctions are only being applied toward exports and reexports. The permanent import of defense articles into the United States, controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (see ATF regulations at 27 C.F.R. Part 447) are not impacted. However, importers are reminded to screen parties against the U.S. government lists of debarred and sanctioned entities, including the lists maintained by the Treasury Department's Office of Foreign Assets Control.

The above alert is for informational purposes only and is not intended to be construed or used as legal advice. Receipt of this alert does not establish an attorney-client relationship.

Questions about this alert may be directed to:

Johanna Reeves: 202-715-9941, [email protected]
Katherine Heubert: 202-715-9940, [email protected]
About Reeves & Dola
Reeves & Dola is a Washington, DC law firm that specializes in helping clients navigate the highly regulated and complex world of manufacturing, sales and international trade of defense and commercial products. We have a deep understanding of the Federal regulatory process, and use our expertise in working with a variety of Federal agencies to assist our clients with their transactional and regulatory needs.
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