Industry sector

BRI Expands List of Items Subject to EAR Russia Industrial Sector Sanctions with Immediate Effect | Husch Blackwell LLP

[co-author: Isabella Peek]

On May 9, 2022, the Bureau of Industry and Security (“BIS”) released for public inspection a final rule adding hundreds of new items to a list of restricted items in Supplement No. 4 to Part 746 of the the U.S. Export Administration ( EAR”). The BIS created Supplement No. 4 Listing two months ago in March 2022 to prohibit the export, re-export, or transfer within the country to or within Russia of specified items on the list (Husch Blackwell has already provided more detailed guidance on this here) The list in Supplement #4 is one of two (2) industry sanctions lists. Russian industry in the EAR, and Monday’s updates to the list in Supplement No. 4 impose strict liability on anyone who exports, re-exports or transfers (within the country) the listed items to or within of Russia Effective immediately (as of May 9, 2022 , date of filing for public inspection), the list has grown with the addition of 478 ten-digit Schedule B codes and 205 six-digit Harmonized Tariff Schedule (“HTS”) codes. . The BIS said in the final rule that the HTS and Schedule B codes “are only intended to assist exporters with their AES filing responsibilities and do not indicate that all items classified under those HTS codes or Schedule B numbers Schedule B are subject to Section 746.5(a)(1)(ii) of the restrictions.” Instead, only items described in the “HTS Description” column are controlled by the sanctions strict liability provisions of the Russian industry sector. The BIS noted that this approach is consistent with comparable controls imposed by the European Union stating “[t]The expansion of these export controls under the EAR, implemented alongside equally stringent measures by partner and allied nations, further limits revenue streams that could support Russia’s military capabilities. , as well as Russia’s ability to withstand the economic impact of multilateral sanctions. ”

Additions to the list include, but are not limited to, building materials, machinery, motors, industrial tooling, cooling and ventilation equipment, and a variety of other items. All license applications for exports, re-exports or transfers (in-country) of items “subject to EAR” and listed in Supplement No. 4 will be reviewed by BIS under a deemed denial of license policy. BIS will review license applications that meet humanitarian needs using the less onerous license review policy on a case-by-case basis. Under the Savings Clause of the Final Rule, any shipment affected by the Final Rule and en route on board a carrier to a port of export, re-export or transfer (in-country) on the date of filing of this final rule for public inspection (May 9, 2022) in accordance with actual orders can go to Russia under a prior and valid export license eligibility.

To view the updated list prior to its publication in Supplement No. 4 to 15 CFR Part 746, click (here) and scroll to pages 10-38 of the PDF. The complete list of Supplement No. 4 is kept here.

Husch Blackwell’s Export Controls and Economic Sanctions team continues to closely monitor all export sanctions and controls developments relating to Russia, Belarus and Ukraine and will provide further updated as conditions change. Additional penalties on May 8, 2022 warrant an additional blog post, which we will post to readers as soon as it is ready.

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