On Monday, June 29th, exports from the U.S. to China, Russia, and Venezuela will be subject to new export compliance requirements. As CTP previously discussed, on April 28, 2020, the Bureau of Industry and Security (BIS) published a rule to expand controls for military end uses or military end users in China, Russia, and Venezuela. Having provided exporters a two-month window to review and modify their compliance procedures, these changes to the Export Administration Regulations (EAR) will now enter into effect.
Under the existing EAR, exporters must submit an Electronic Export Information (EEI) filing in the online Automated Export System (AES) except in certain circumstances, such as shipments valued at $2,500 or less. Additionally, the obligation to enter the Export Control Classification (ECCN) in the EEI was not required when the only reason for control was for anti-terrorism (AT).
The new rule amends §758.1 of the EAR to require exporters to submit an EEI filing for all shipments to China, Venezuela, and Russia, regardless of the value. The ECCN must be entered for all shipments, even if an export license is not required. The only exceptions to these requirements are if the shipment is eligible for export pursuant to License Exception GOV as described in §740.11 or if the shipment includes only items classified as EAR99. The purpose of modifying the EEI reporting requirement was to provide BIS, and other U.S. government agencies, with increased visibility of shipments to these countries.
As a result, exporters looking to ship to China, Venezuela, and Russia should ensure that they have the appropriate export classification information prior to exporting. While EAR99 shipments do not trigger the new requirement to these countries, exporters and/or freight forwarders submitting information on their behalf should be certain of their export classifications.
Initially, the EEI requirement for all shipments to these countries was to enter into effect as of June 29th. However, BIS appears to have changed course. Based on a post to the BIS website, the EEI filing requirement will be staggered. For items described in Supplement No. 2 to Part 744, an EEI filing is required as of June 29th. This applies to the following ECCNs: 1A290, 1C990, 1C996, 1D993, 1D999, 1E994, 2A991, 2B991, 2B992, 2B996, 3A992.g, 3A999.c, 3E991, 4A994, 4D993, 4D994, 5A991, 5D991, 5E991, 6A995, 6C992, 6A993, 7A994, 7B994, 7D994, 7E994, 8A992, 8D992, 8E992, 9A991, 9D991, and 9E991. For exports of all other items to China, Venezuela, or Russia, an EEI filing will not be required until September 27, 2020, giving exporters an extra three months to update their policies and procedures.