On January 15, 2021, the Bureau of Industry and Security (BIS) published an Interim Final Rule to implement new end-user and end use controls mandated by the Export Control Reform Act of 2018 (ECRA).
Most notably, the rule adds a new control that will require U.S. persons to obtain a license before “supporting” certain “military-intelligence” end uses and end users in China, Russia, Venezuela, and Country Group E:1 and E:2 destinations. The rule will also prohibit any person from exporting, reexporting, or transferring any item subject to the EAR to military-intelligence end uses and end users in those countries.
“Military-intelligence” end uses are defined as any intelligence or reconnaissance organization of the armed services (army, navy, marine, air force, or coast guard) or national guard. BIS provides an illustrative list of military-intelligence end users in the new rule, which includes China’s Intelligence Bureau of the Joint Staff Department, Russia’s Main Intelligence Directorate (GRU), and Venezuela’s General Directorate of Military Counterintelligence (DGCIM). Military-intelligence end uses include those that support the actions or functions of a military-intelligence end user. The new controls are separate from the EAR’s other military end use and end user rules, which apply to a more limited set of items controlled under certain Export Control Classification Numbers when shipped to a broader array of military end users and uses in Russia, China, and Venezuela.
Among other changes, the rule also:
- Broadens the existing WMD end use controls in the EAR to apply to U.S. person activities that “will support” prohibited end uses, as opposed to activities that “directly support” prohibited end uses. Support is defined broadly to include shipping or transferring any item not subject to the EAR when you know it will be used for a prohibited end use, facilitating such a shipment, or performing any contract, service, or employment that you know will assist with or benefit a prohibited end use;
- Broadens the existing WMD end use controls to apply to the operation, installation, maintenance, repair, overhaul, or refurbishing of items; and
- Clarifies that a license is not required where another U.S. government agency has already granted a license for the same activities pursuant to its own regulations.
Companies that may do business with “military-intelligence” end users or end uses should update their internal procedures, including export control checklists, to ensure compliance with these new requirements.
BIS is accepting public comments on this rule through March 1, 2021. The rule takes effect on March 16, 2021.
 More specifically, military-intelligence end uses are defined as the design development, production, development, production, use, operation, installation, maintenance, repair, overhaul, or refurbishing of, or incorporation of items controlled for defense purposes under the International Traffic in Arms Regulations or the EAR’s 600 series or A018 controls when such uses are intended to support the actions or functions of a military-intelligence end user.