Overview
On July 14, 2026, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a final rule, entitled Enhanced Favorable Treatment for the United Arab Emirates under the Export Administration Regulations (“Rule”). This Rule amends the Export Administration Regulations (“EAR”) to significantly upgrade the export control status of the United Arab Emirates (“UAE”) under the EAR, in recognition of the UAE being a U.S. Major Defense Partner, its support in advancing U.S. national security interests, and its commitment to implementing export controls to protect sensitive U.S. technology.
Key Regulatory Changes
The Rule provides enhanced favorable treatment for the UAE and facilitates its secure access to certain sensitive items subject to the EAR through the following notable changes:
- Transition to Country Group A:5: The Rule removes the UAE from Country Groups D:3 and D:4 and adds it to Country Group A:5, allowing exports, reexports, and transfers (in-country) (hereinafter “exports”) of certain items controlled for chemical, biological, or missile technology reasons to qualify for license exceptions that were previously unavailable to the UAE. The addition of the UAE to Country Group A:5 also allows exports of certain items to or within the UAE to qualify for License Exception Strategic Trade Authorization (“STA”), subject to certain new conditions under the Rule and discussed below.
- Advanced Computing Items: The Rule authorizes exports of certain advanced computing items (e.g., ECCNs 3A090.a/.b, 4A090.a/.b, and related .z items) destined to or within the UAE without a license if the ultimate consignees and end users are approved parties identified in a new Supplement No. 8 to Part 740 (“Approved Entities”).
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- The Approved Entities include (1) government agencies of the UAE (not including state-owned corporations and contractors and grantees of UAE government agencies), (2) certain listed UAE commercial entities who apply for and receive BIS approval through the Advisory Opinion process in EAR § 748.3(c), and (3) certain listed U.S.-headquartered artificial intelligence (“AI”) entities and their subsidiaries (including their UAE-based subsidiaries).
- Eligibility for License Exception STA: The Rule creates a new footnote 5 to the Country Groups in Supplement No. 1 to Part 740 stating that License Exception STA is only available for exports to or within the UAE if the ultimate consignees and end users are Approved Entities for License Exception STA. This includes qualifying exports of advanced computing items as well as certain missile systems and Unmanned Aerial Vehicles (“UAVs”) controlled under “600 series” ECCNs. Such exports to Approved Entities under License Exception STA are still subject to the existing conditions and restrictions found in License Exception STA.
- Missile Systems/ UAVs End-Use and Support Controls: By removing the UAE from Country Group D, exporters are no longer subject to end-use restrictions under § 744.3(a) for exports of items to or within the UAE where there is knowledge that the items will be used in certain missile systems, rockets, or UAV projects. Similarly, U.S. persons may now provide certain support, including servicing, financing, and shipping, to covered missile-related activities in the UAE without first obtaining a license, as was previously required under § 744.6(b).
Additional benefits of the removal of the UAE from Country Group D include the lifting of restrictions on the use of License Exceptions Temporary Imports, Exports, Reexports and Transfers (in-country) (“TMP”), Governments, International Organizations, International Inspections Under the Chemical Weapons Convention, and the International Space Station (“GOV”), Additional Permissive Reexports (“APR”), Technology and Software - Unrestricted (“TSU”), Aircraft, Vessels and Spacecraft (“AVS”), and Advanced Computing Authorized (“ACE”), and Baggage (“BAG”). License exceptions that were previously available to the UAE prior to the Rule remain eligible for exports as long as any relevant ECCN requirements are met (e.g., License Exceptions Shipments to Country Group B countries (“GBS”) and Shipments of limited value (“LVS”)).
Compliance Pitfalls
Though the Rule provides significantly more flexibility to export to or within the UAE without a BIS license, exporters should use caution to determine if their shipment or transmission involving the UAE is in fact license-free.
Notably, the approved UAE commercial entities currently listed in Supplement No. 8 to Part 740 include only Group 42 Holding Ltd (“G42”) (including G42 Cloud Technology LLC) and Core42 Technology Projects (“Core42”). The Approved Entity status for both companies automatically expires on April 6, 2027, absent subsequent notice by BIS. Additionally, Core42 and G42 are only authorized to receive advanced computing items license-free but are not authorized for License Exception STA. The Rule also identifies the UAE company MGX as benefiting from a favorable license review policy for applications involving the export of semiconductors and servers to the UAE, but BIS does not list MGX as an Approved Entity.
BIS also specifically notes in the Rule that the approval of a party through Supplement No. 8 to Part 740 does not overcome the end use and end user-based license requirements in Part 744 of the EAR.
Though several license exceptions are now available for exports to or within the UAE, the existing conditions and restrictions under each license exception must be read carefully to determine whether the exception may in fact be utilized.
Additionally, these revisions to the export control licensing policies related to the UAE are applicable only to the EAR. To date, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) has not published any similar favorable license exemptions under the International Traffic in Arms Regulations (“ITAR”) for the UAE.
For more information on how the Rule may impact your business or to assist with analysis under the Rule, please contact a member of Steptoe’s Export Controls team.
