BIS Adopts a “one China” policy regarding license exceptions for Hong Kong

Effective immediately (June 30, 2020) BIS has suspended use of all license exceptions for exports, re-exports or transfers within Hong Kong of items subject to the EAR unless such items are eligible for the same license exception when exported or re-exported to the Peoples Republic of China. In essense, this new ruling creates a “one China” policy with respect to that manner in which the EAR treats exports, re-exports and transfers within Hong Kong and the Peoples Republic.

BIS is providing an allowance for use of Hong Kong license exceptions for shipments on dock for loading, on lighter, laden aboard an exporting or transferring carrier, or en route aboard a carrier to a port of export or reexport on June 30, 2020. Such shipments are not subject to this new rule and may proceed to their destination under the previous License Exception eligibility.

BIS is taking this action because the Chinese Communist Party has imposed new security measures on Hong Kong which undermine its autonomy and thereby increase the risk that sensitive U.S. items will be illegally diverted to the Chinese People’s Liberation Army or Ministry of State Security, Iran, or North Korea.

The official new ruling from BIS can be accessed HERE. For further details please contact TSI Global Consulting.

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