International Law Advisory - BIS Implements License Exception for Exports of Certain AT-Controlled Items to US Persons in Libya

Tomorrow, the Department of Commerce, Bureau of Industry and Security (“BIS”) will publish an interim rule in the Federal Register, amending the Export Administration Regulations (“EAR”) to authorize certain exports and re-exports to Libya.  Attached is a preliminary copy of the regulation, which was made available today by the National Archives.

The new interim rule will be effective upon publication tomorrow.  It creates a new license exception in section 740.19 of the EAR, known as License Exception “USPL,” for exports and re-exports of specified goods to “ US persons” working in Libya.  The license exception covers items classified under the following export control classification numbers (“ECCNs”) in the EAR Commerce Control List:

• 2A994 (portable generators);
  
• 5A992 (encryption hardware);
  
• 5D992 (encryption software not controlled under 5D002);
  
• 9A990 (diesel engines);
  
• 3A991 (certain electronic devices) in the following subheadings: 
  a through j, and n;
  
• 3A992 (certain electronic equipment) in the following subheadings: 
  b.1, b.2 and c;
  
• 3B992.b (certain test and inspection equipment for electronic components);
  
• 4A994 (computers), for items with CTP levels up to 12,000 MTOPS; and
  
• 5A991 (certain telecommunications equipment) in the following subheadings: 
  b.2, b.3, b.4, b.7, c.1 through c.9, e, g, and h.

The ECCNs listed above comprise a wide range of standard office products controlled under the EAR for antiterrorism (“AT”) reasons, which thus far have been restricted for export or re-export to Libya due to Libya' s continuing status, under US regulations, as a state sponsor of terrorism.  License Exception USPL should be of significant value to US companies that have been re-establishing their presence in Libya since the lifting of the US embargo in April 2004, as it will facilitate the development of on-site Libyan offices and capabilities in a much more efficient and timely manner.

It should be noted, however, that License Exception USPL contains several important restrictions.  First, it applies only to exports / re-exports to “US persons” (as defined in Part 772 of the EAR), and for “exclusive use in business or professional activities (including humanitarian activities) by US persons or their employees only[.]”  The license exception does not, therefore, appear to extend to foreign subsidiaries of US companies operating in Libya.  Second, items exported under License Exception USPL must remain under the control and supervision of the US person employer, and cannot be transferred within Libya to non-US entities without prior BIS authorization.

This rule represents the latest in a series of steps by the Bush administration to gradually ease export restrictions regarding Libya, in response to Libya' s progress at dismantling its weapons of mass destruction programs and renouncing terrorism.  However, Libyan export restrictions remain very strong; apart from the above-referenced ECCNs, most AT-controlled items remain subject to license requirements for export or re-export to Libya (including for US-person end users), and license exceptions continue to be limited.

The interim rule invites public comments, which must be submitted to BIS within 30 days of the publication of the rule (i.e., by December 15, 2005) .  We will continue to monitor the status of Libyan export controls, and will advise you of any further developments. Should you have any questions in the meantime, please do not hesitate to contact Ed Krauland at 202-429-8083) or David Lorello at 202-429-6757.