On April 28, 2020, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a final rule to expand license requirements on exports, reexports, and transfers (in-country) of items intended for military end use or military end users in China, Russia or Venezuela. The final rule will become effective on June 29, 2020.
Notably, the final rule expands the definition of “military end use” under the Export Administration Regulations (“EAR”). EAR’s current definition of “military end use” refers to both direct use (for parts, components or subsystems of weapons and other defense articles) and indirect use (weapon design and development, testing, repair and maintenance). The final rule broadens such definition beyond any item for the “use,” “development” or “production” to include any item that supports or contributes to the operation, installation, maintenance, repair, overhaul, refurbishing, development or production of military items.
In addition, the final rule broadens the licensing requirements for exports, reexports, and transfers (in-country) of items intended for military end users in China, on top of the existing restrictions on the military end use. This expansion will require enhanced due diligence on end users in China.