Regulatory Update: BIS moves Mexico and Cyprus to Country Group A:6 making them eligible for license exception STA [EAR Part 740.20 (c)(2)], Ukraine moved from Group D to Country Group B opening up a less restrictive licensing policy and potential use of license exceptions previously unavailable.

In a final rule published and effective December 28, 2020 the Department of Commerce, Bureau of Industry and Security amended the Export Administration Regulations, revising Country Group designations for Ukraine, Cyprus and Mexico. The following most important changes became effective December 28, 2020:

Ukraine: Was removed from Group D:1 as a result of that country’s cooperation with the United States on a “variety of export control matters” and moved to Group B. Placing Ukraine in Group B in combination with the removal of Group D status and Ukraine’s inclusion in Groups A:2, A:3 and A:4 makes that country eligible for certain license exceptions when applicable conditions are met, and restrictions noted in § 740.2 do not apply. The now available license exceptions are: Shipments of limited value (LVS)(§ 740.3); Temporary imports, exports, reexports, and transfers (in-country) (TMP)(§ 740.9); Servicing and replacement of parts and equipment (RPL) (§ 740.10); Gift parcels and humanitarian donations (GFT)(§ 740.12); Baggage (BAG)(§ 740.14); Aircraft and vessels (AVS)(§ 740.15); Additional permissive reexports (APR)(§ 740.16); and Encryption, commodities, software, and technology (ENC)(§ 740.17).

Also, as a result of the amendments in this rule, applications to export and reexport to Ukraine items listed on the Commerce Control List [15 CFR § 774] or “CCL” and controlled for national security reasons will no longer be subject to the case-by-case licensing policy in § 742.4(b)(2), and now will be subject to a licensing policy of approval per § 742.4(b)(1)(i). The restrictions on the export, reexport, and transfer (in-country) of certain microprocessors to military end uses and end users in Country Group D:1, pursuant to § 744.17, (Restrictions on certain exports, reexports, and transfers (in-country) of microprocessors and associated ‘‘software’’ and ‘‘technology’’ for ‘military end uses’ and to ‘military end users’) also no longer apply to Ukraine.

But it is notable that License Exceptions Shipments to Country Group B countries (GBS) (§ 740.4) and Technology and software under restriction (TSR) (§ 740.6) are, under this regulatory change, NOT available for exports to Ukraine.

Cyprus: Was added to Country Group A:6 thus allowing for use of license exception STA(§ 740.20 (c )(2) for lesser sensitive items that are only controlled for National Security reasons and are not ineligible under any clause noted in  §740.2. An important note is that under 740.20 (c)(2) Cyprus is NOT STA eligible for Series 9×515 or Series 600 items. Cyprus also is in Country Group D:5 (U.S. Arms Embargoed Countries), however, consideration of license exceptions must include particular review and compliance with the restrictions on items in a 9×515 or ‘‘600 series’’ ECCN as set forth in paragraphs (a)(12) and (13) of § 740.2.

Mexico: Similar to the case of Cyprus, Mexico was added to Country Group A:6 thus allowing for use of license exception STA [§ 740.20 (c )(2)] for lesser sensitive items that are only controlled for National Security reasons and are not ineligible under any clause noted in  §740.2. An important note is that under 740.20 (c)(2) Mexico is NOT STA eligible for Series 9×515 or Series 600 items.

For further information on these regulatory changes and their impact on specific export, re-export or transfers please contact TSI Global Consulting.

Share via emailShare on FacebookShare on Twitter

Testimonials