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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 December 23, 2020, the Department of Commerce&rsquo;s Bureau of Industry and Security (BIS) published a <a href="https://www.federalregister.gov/documents/2020/12/23/2020-28101/removal-of-hong-kong-as-a-separate-destination-under-the-export-administration-regulations" target="_blank" rel="noopener noreferrer">final rule</a> in the Federal Register that removes Hong Kong as a &ldquo;separate destination&rdquo; under the Export Administration Regulations (EAR). This rule follows U.S. Secretary of State Michael Pompeo&rsquo;s May 2020 <a href="https://www.wiley.law/alert-Secretary-Pompeos-Announcement-on-Hong-Kong-Opens-Export-Trade-and-Sanctions-Liabilities" target="_blank" rel="noopener noreferrer">announcement</a>&nbsp;that Hong Kong no longer warrants treatment under U.S. laws as autonomous from China, and implements President Donald Trump&rsquo;s <a href="https://www.federalregister.gov/documents/2020/07/17/2020-15646/the-presidents-executive-order-on-hong-kong-normalization" target="_blank" rel="noopener noreferrer">July 2020 Executive Order</a> directing BIS &ldquo;to suspend or eliminate different and preferential treatment for Hong Kong.&rdquo; &nbsp;The final rule became effective on December 23, 2020.
Specifically, the final rule makes the following changes with respect to exports, reexports or in-country transfers of items subject to the EAR to Hong Kong:
<ul>
<li>Removes the Hong Kong entry from the Commerce Country Chart (Supplement No. 1 to Part 738 of the EAR), such that &ldquo;[l]icense requirements for Hong Kong will now be governed by the Commerce Country Chart entry for China;&rdquo;</li>
<li>Removes Honk Kong&rsquo;s eligibility to receive different license exceptions from China; and</li>
<li>Amends the Electronic Export Information (EEI) filing requirement for exports of items on the Commerce Control List to Hong Kong.</li>
</ul>
These changes are in addition to the removal of license exceptions for exports to Hong Kong made earlier this year by BIS in its <a href="https://www.federalregister.gov/documents/2020/07/31/2020-16278/revision-to-the-export-administration-regulations-suspension-of-license-exceptions-for-hong-kong" target="_blank" rel="noopener noreferrer">July 31, 2020 final rule</a>. For more information on those exceptions, please see <a href="https://www.thompsonhinesmartrade.com/2020/07/bis-publishes-final-rule-suspending-ear-license-exceptions-for-hong-kong/">update dated July 31, 2020</a>.
Consequently, Hong Kong now will fall into Country Group D and is subject to national security, chemical and biological, missile technology and arms embargo restrictions in the EAR. Additionally, exports, reexports and in-country transfers of items subject the EAR to Hong Kong will also be subject to the new <a href="https://www.federalregister.gov/documents/2020/12/23/2020-28052/addition-of-military-end-user-meu-list-to-the-export-administration-regulations-and-addition-of" target="_blank" rel="noopener noreferrer">Military End User Rule</a> (&ldquo;MEU Rule&rdquo;). For more information on the MEU Rule, please see <a href="https://www.thompsonhinesmartrade.com/2020/12/commerce-issues-military-end-user-list-for-exports-to-china-russia-and-venezuela/">update dated December 23, 2020</a>.
The rule also includes a savings clause, which provides that all export and reexport shipments that may no longer be made under BIS&rsquo;s No License Required (NLR) designation and were either on dock for loading, on lighter, laden aboard an exporting or transferring carrier, or en route aboard a carrier to a port of export or reexport on December 23, 2020 to Hong Kong, may proceed to their destination under NLR until January 22, 2021.

Commerce Removes Hong Kong as a ‘Separate Destination’ Under the EAR

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