International Law Advisory - BIS Expands Missile-Related End-Use and End-User Controls

The United States Department of Commerce, Bureau of Industry and Security (“ BIS”) amended the Export Administration Regulations (“ EAR”) on Monday with the publication of an interim rule to expand the license requirements for missile-related end-users and end-uses.  The interim rule also amends the list of missile projects of concern in the regulations.  The interim rule was published at 69 Fed. Reg. 64657 (November 8, 2004).  

The interim rule significantly expands BIS’s missile technology controls by imposing a new license requirement in part 744.3 of the EAR for the export, reexport, or transfer of any item subject to the EAR if one knows or is informed that such items will be used in, or in the production of, rocket systems or unmanned air vehicles designed for the delivery of chemical, biological, or nuclear weapons.  This license requirement applies regardless of the location of the end user or the range of the rocket system or unmanned air vehicle.  As a consequence of this expansion of the license requirements, the list of restricted missile projects in D:4 countries has been removed from Supplement No. 1 to part 740 of the EAR because of its narrow scope.

Furthermore, the end-use license requirement for Country Group D:4 has been expanded.  Section 744.3 of the EAR has been revised to require a license for the export, reexport, or transfer of any items subject to the EAR if one knows or is informed that the item will be used in or by a country listed in Country Group D:4 in the design, development, production or use of rocket systems or unmanned air vehicles capable of a range of at least 300 kilometers.  A license would also be required if the exporter is unable to determine the range or capabilities of the rocket systems or unmanned air vehicles.  As noted above, exports of any item subject to the EAR destined for any rocket systems or unmanned air vehicles designed for the delivery of chemical, biological, or nuclear weapons will require a license for export to all countries, regardless of range.

According to the interim rule, “rocket systems” is defined to include, but is not limited to, “ballistic missile systems, space launch vehicles, and sounding rockets.”  “Unmanned air vehicles” includes, but is not limited to, “cruise missile systems, target drones and reconnaissance drones.”

The interim rule includes a savings clause that allows any items subject to a license requirement as a result of the rule to proceed with export as long as the items “were on dock for loading, on lighter, laden aboard an export carrier, or en route  aboard a carrier to a port of export on November 8, 2004,” and provided that the items are exported from the United States before December 8, 2004.

The interim rule is broad-reaching, and applies to any item subject to the EAR, including items on the Commerce Control List, EAR99 items, technical data, technology, and software.  The rule could have implications for U.S. companies attempting to continue their service or support of projects or end-users with whom they have previously had lawful dealings.

We will continue to keep you apprised of sanctions and export control developments.  If you have any questions, please feel free to contact Ed Krauland at 202.429.8083 or Meredith Rathbone at 202.429.6437.