U.S. Imposes Additional Export Restrictions on Russia
Monday, March 22, 2021

Effective March 18, 2021, the United States imposed additional restrictions on certain exports (and reexports) to Russia.  The restrictions are being imposed pursuant to Section 306(a) of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, based on a determination that Russia “has used chemical or biological weapons in violation of international law or lethal chemical or biological weapons against its own nationals.”

So what are the restrictions and what do they mean in practice?

ITAR (Defense) Exports

The Department of State added Russia to Section 126.1 of the International Traffic in Arms Regulations (“ITAR”), which enumerates countries that are subject to a policy of denial for exports, reexports, and temporary imports of items described on the United States Munitions List (“USML”).  See 86 F.R. 14802 (March 18, 2021).  The Department of State will allow for a case-by-case review of this policy for exports that support government space cooperation and commercial space launches prior to September 1, 2021. 

In practice, the U.S. government has generally denied licenses to export ITAR-controlled items to Russia for a number of years.  Nonetheless, the formal addition of Russia to ITAR 126.1 will have some important practical consequences for industry because it makes most ITAR exemptions from license requirements unavailable for Russia.  Notable examples include the exemptions in ITAR 123.16 for trade shows and exports to U.S.-owned subsidiaries, the exemptions in ITAR 125.4 for personal use (e.g., travel with electronic devices containing ITAR-controlled data) and deemed exports by U.S. institutions of higher learning to their foreign‑person employees, and the exemption in ITAR 126.18 for dual and third country national (“DTCN”) employees of foreign licensees.  Thus, for example, U.S. companies will need to update internal procedures for authorizing international travel with electronic devices that may contain ITAR-controlled technical data to exclude Russia.  U.S. universities will need to revisit ITAR access by foreign-person employees who are nationals of Russia.  And foreign companies who rely on the exemption in ITAR 126.18(c)(2) to authorize access to ITAR-controlled items by DTCN employees will need update their procedures to screen such employees for “substantive contacts” to Russia. 

EAR (Dual Use, Commercial, and Less Sensitive Military) Exports

Addition of Russia to ITAR 126.1 triggers Russia’s addition to Country Group D:5 for purposes of the United States’ dual use export controls, the Export Administration Regulations (“EAR”).  As a result, the Department of Commerce announced that it will generally apply a presumption of denial to license applications for exports to Russia of items that are described on the Commerce Control List (“CCL”) under an Export Control Classification Number (“ECCN”) having National Security (NS) as a reason for control. However, the Bureau of Industry and Security (“BIS”) will not apply the presumption of denial to license applications that relate to: (i) items necessary for the safety of flight of civil fixed-wing passenger aviation; (ii) deemed exports and reexports to Russian nationals; (iii) items destined for wholly-owned U.S. subsidiaries and other foreign subsidiaries of U.S. companies that are located in Russia; and (iv) items in support of government space cooperation.  In addition, for a limited time, until September 1, 2021, BIS will entertain license applications for items in support of commercial space launches.

The March 18 changes also affect the availability of EAR license exceptions for export of NS‑controlled items to Russia.   BIS issued a waiver to permit continued use of license exceptions TMP (temporary exports), GOV (certain governmental activities and the International Space Station), BAG (personal baggage), AVS (certain exports related to aircraft, vessels and spacecraft), and ENC (encryption items) for NS-controlled items destined to Russia.  However, BIS suspended license exceptions RPL (servicing and replacement), TSU (technology and software under restriction), and APR (permissive reexports) for such items.

As with the ITAR changes discussed above, addition of Russia to Country Group D:5 may also cause disruption for foreign companies that have employees with “substantive contacts” with Russia.  Under EAR 734.20(c), release of EAR-controlled technology to employees determined, via appropriate screening procedures, not to have “substantive contacts” with D:5 countries is not treated as a deemed reexport and therefore does not require EAR authorization.  However, release of EAR-controlled technology to employees who do have substantive contacts with D:5 countries—now including Russia—does constitute a deemed reexport and, depending on the classification of the technology at issue, may require a license from BIS. 

Lastly, the addition of Russia to Country Group D:5 means that foreign companies exporting foreign-produced items to Russia will require a U.S. export license for those foreign-produced items if they: (i) contain any amount of U.S.-origin content classified under a 9×515 or “600 series” ECCN, other than .y paragraph items; or (ii) are “military commodities” and incorporate one or more of the commodities described in ECCN 0A919.a.1.  See 15 C.F.R. 734.4(a)(5), (a)(6).


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