Supply electronics for the civilian sector will be impossible without a license, writes “RBC”.
Once again the United States tightened export control regulations in respect of the supply of goods to Russia. June 29 came into force, two new regulations Bureau of industry and security (BIS) of the U.S. Commerce Department, which further restrict the potential export of sensitive technology to Russia (as well as in China and Venezuela).
Enter a license for civil supplies
The first rule negate the exception for American exporters, who could ship to Russia without a license regarding a wide range of goods if they are intended for civil use by civil users. It is the bearings, semiconductors, computers, telecommunications equipment, radar systems, equipment for the production of airplane engines and more. Now, even if these products are supposed to be used exclusively for civilian purposes, the exporter will need to obtain a special license from the U.S. Commerce Department. It takes extra time, and in the export permit may be refused if BIS will appear some doubts in the end user of such products.
Change in addition to Russia, China and Venezuela will also affect Armenia, Azerbaijan, Ukraine, Belarus, Kazakhstan and Iraq.
BIS explained the abolition of the “civil” licenses for such supplies so that countries like China or Russia often employ a strategy of integration of the civilian and military sectors, making it difficult for American exporters identify the end user. In addition, sometimes American technology supplied to address civil consumers, subsequently, are in the hands of the military-industrial organizations.
The abolition of the “civil” exception would affect some American exporters (and re-exporter of American products), says Doug Jacobson, managing partner of U.S. law firm Jacobson Burton PLLC Kelley specializing in sanctions and export controls.
“For example, I just applied for an export licence and USA for our European customer for the supply of electronic product in Russia, which normally would fall under the exception due to civilian use,” said Jacobson RBC. In General, the abolition of this exception should not affect the ability of firms to sell their products [including Russia], but the process will take longer because of the need to obtain a license by BIS.
The inability of IPhone shipments for the army
The second rule, involving Russia, China and Venezuela, expanding the definition of “military use” goods, which would reduce the already minimal possibility of the Russian defense sector to buy American goods, technology and software. Under the “military end user” are understood the armed forces, the national police, the national guard, the intelligence services, as well as “any person or entity whose actions or functions are intended to support military end-use” goods. The addition of the last paragraph will complicate the supply of American goods to users in Russia that has anything to do with the military or the security sector.
Under the “military end-use” will now be understood not only directly develop or produce military products, but also the use of any product to “support or promote the operation, installation, maintenance and repair, modernization” of military products. The question of exports to Russia of goods and technology for “military end user” or “military end use” (extended definition) of the BIS will follow the policy of denial: in other words, exporters should not even try to obtain a license for export.
The list of goods that now cannot be put to military users, added generators for use in nuclear power plants, sensors and lasers propulsion systems, specific equipment for vessels acoustic equipment for detection of underwater objects, etc. for Example, supply of the iPhone or Microsoft Windows military user in Russia or China will be virtually impossible, noted in the blog of international law firm Pillsbury Winthrop Shaw Pittman.
Doug Jacobson believes that these changes are most affected by exports of electronic parts and components in China. “The most difficult thing now is to determine whether the end-user in China, military or not. In many cases this is difficult to do, so we encourage companies to request end-user certificates from his customers and distributors,” — said the lawyer.
The new rules stipulate that the restrictions will not affect the export or re-export to Russia of certain goods destined for the International space station (ISS), including spacecraft launches to the station. The US administration usually brings space cooperation with Russia under the scope of the sanctions.
In February, the U.S. Commerce Department has translated Russia in the category of countries of concern from the point of view of the export of missile and nuclear technologies. In the result, the United States stopped issuing export licenses to Russia of materials that can be used to manufacture chemical or biological weapons technologies, which are dangerous from the point of view of nuclear proliferation, and missile technologies (including ballistic missiles, launch vehicles, sounding rockets, and unmanned systems — cruise missiles, reconnaissance drones, etc.).
In August 2018, the United States banned the supply of Russian state enterprises American goods and technology, marked in the trade nomenclature of the United States sign national security: avionics, underwater vehicles, some gas turbines, calibration equipment, electronic components, information security system etc. For civilian use, commercial consumers, nothing has changed.
As introduced in late June, the new restrictions will affect U.S. exports to Russia, say difficult, because information on the actual export of sensitive goods from the United States is not public.
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