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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On March 2, 2022, the Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) issued a <a href="https://public-inspection.federalregister.gov/2022-04819.pdf" target="_blank" rel="noopener">Final Rule</a> that has added new license requirements and review policies for Belarus to the Export Administration Regulations (EAR) which now subject Belarus to the same sanctions that were imposed on Russia under the EAR effective February 24, 2022. See Update of <a href="https://www.thompsonhinesmartrade.com/2022/02/united-states-imposes-new-russia-related-export-restrictions/">February 25, 2022</a>. The Department of Commerce <a href="https://www.commerce.gov/news/press-releases/2022/03/commerce-imposes-sweeping-export-restrictions-belarus-enabling-russias" target="_blank" rel="noopener">indicated</a> that application of these controls on Belarus &ldquo;will help to prevent the diversion of items, including technology and software, in the defense, aerospace, and maritime sectors to Russia through Belarus, and degrade both nations&rsquo; ability to sustain military aggression.&rdquo; In summary, these sanctions include:
<ul>
<li>Commerce Control List Requirements &ndash; The final rule adds new license requirements for Belarus. These license requirements apply to export, reexport or transfer (in-country) to or within Belarus of any item subject to the EAR and specified in an Export Control Classification Number (ECCN) in Categories 3-9 of the CCL, excluding deemed exports and deemed reexports. This includes items, equipment, software and technology for microelectronics, telecommunications, sensors, navigation, avionics, marine, and aircraft.</li>
<li>Foreign Direct Product (FDP) Rules &ndash; The final rule adds two FDP rules specific to Belarus and Belarusian military end-users. Under the FDP rules, the U.S asserts jurisdiction over the export, re-export and in-country transfer of certain foreign-produced items located outside the United States that are produced using U.S.-origin technology. The rule also adds Belarus to the Russia military end-users FDP rule and the applicability of Footnote 3 of the Entity List for Belarusian military end-users.</li>
<li>New License Review Policy of Denial &ndash; The final rule adjusts BIS&rsquo; licensing review policy for Belarus to a general &ldquo;policy of denial.&rdquo; The following types of license applications will be reviewed on a case-by-case basis to determine whether the transaction in question would benefit the Belarus government or defense sector: applications related to safety of flight, maritime safety, humanitarian needs, government space cooperation, civil telecommunication infrastructure, government-to-government activities, items destined to wholly owned U.S. subsidiaries, foreign subsidiaries of U.S. companies that are joint ventures with other U.S. companies, or wholly owned subsidiaries and joint ventures of companies from partner countries identified in Country Groups A:5 and A:6 in supplement no. 1 to part 740.</li>
<li>Additional Restrictions on License Exceptions &ndash; The final rule adds significant restrictions on license exceptions available for exports, reexports and transfers (in-country) for Russia.</li>
<li>Expansion of the Scope of Military End-Use and Military End-User Restrictions &ndash; The final rule expands the scope of military end-use and military end-user restrictions to Russia to encompass all items subject to EAR except for food or medicine designated as EAR99. The rule also adds Belarus to the countries subject to the &ldquo;military-intelligence end use&rdquo; and &ldquo;military-intelligence end user&rdquo; (MIEU) restrictions.</li>
<li>Entity List Additions &ndash; The final rule adds JSC Integral and The Ministry of Defence of the Republic of Belarus (including the Armed Forces of Belarus and all operating units wherever located) to the Entity List.</li>
</ul>
In addition, this final rule makes revisions to the licensing scope for telecommunications/information security to note that &ldquo;commodities and software classified under ECCNs 5A992 or 5D992 do not require a license to or within Russia or Belarus for civil end-users that are wholly-owned U.S. subsidiaries, foreign subsidiaries of U.S. companies that are joint ventures with other U.S. companies, joint ventures of U.S. companies with companies headquartered in countries from Country Group A:5 and A:6 [see <a href="https://www.ecfr.gov/current/title-15/subtitle-B/chapter-VII/subchapter-C/part-740/appendix-Supplement%20No.%201%20to%20Part%20740" target="_blank" rel="noopener">Supplement No.1 to Part 740</a> of the EAR], the wholly-owned subsidiaries of companies headquartered in countries from Country Group A:5 and A:6, or joint ventures of companies headquartered in Country Group A:5 and A:6 with other companies headquartered in Country Groups A:5 and A:6.&rdquo;
This Final Rule will become effective on March 8, 2022. BIS, however, has stated that exports of items impacted by this rule that were en route aboard a carrier to a port of export, reexport, or transfer (in-country) on March 26, 2022, pursuant to actual orders for reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under any previous eligibility for a License Exception or reexport or transfer (in-country) without a license (NLR).

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

Partner

Francesca M.S. Guerrero

Samir D. Varma

International Trade

Biden Imposes Sanctions on Belarus for “Enabling” Russia’s Invasion of Ukraine