New License Requirements for All ECCNs in Categories 3-9

The final rule is an unprecedented expansion of licensing requirements on all items classified in any ECCN in CCL Categories 3 through 9. Most high-level ECCNs are already controlled for export to Russia, but this rule adds the low-level antiterrorism (AT) controlled items that are unilaterally controlled and, until now, were only controlled for export to embargoed countries or military end-uses and end-users in certain countries. These categories include very basic chips, laptop computers, mass-market encryption devices, low-level sensors and lasers, basic navigation equipment (think your garden variety GPS), vessels, and aircraft parts. The rule carves out deemed exports and deemed reexports (where a non-US person accesses export-controlled technology), but everything else is covered – exports, reexports, and in-country transfers of all items subject to the EAR in CCL Categories 3-9.

Interestingly, the rule makes exceptions for countries that “are adopting or have expressed intent to adopt substantially similar measures,” which are identified in a new Supplement No. 3 to Part 746 and currently includes the twenty-seven countries of the European Union, Australia, Canada, Japan, New Zealand, and the United Kingdom (Supplement 3 Countries). None of these countries actually have equivalent ECCNs to many of those now subject to controls to Russia because those ECCNs (e.g., ECCN 4A994, 5A991, 9A991) are unilateral export controls imposed by the United States. As such, it will be interesting to see how US allies are able to impose these “substantially similar measures.” The European Council conclusions published February 24th speak in general terms of sanctions that “the financial sector, the energy and transport sectors, dual-use goods as well as export control and export financing, visa policy, additional listings of Russian individuals and new listing criteria” indicating that the precise EU export controls remain to be seen.

Bottom line: if you have any ECCNs in Categories 3-9, you need to put an immediate manual or automated block in your enterprise resource planning (ERP) system for Russia. This rule goes into effect immediately. Unless you qualify for a license exception, the only items that are free to go were what you had on your dock on February 24, 2022, or what your freight forwarder was driving to the airport.