As part of the U.S. government’s continuing effort to rebuke Russia for its purported annexation of the Crimea region of Ukraine, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published broad restrictions on exports, reexports, and transfers of items subject to the Export Administration Regulations (EAR) to or within the Crimea region. These new prohibitions are consistent with an Executive Order issued by the President on December 19, 2014, effectively cutting off business with the Crimea region.
A BIS license is now required to export or reexport all EAR-controlled items to the Crimea region in Ukraine, with the exception of food and medicine designated as EAR99. This license requirement also applies to transfers of commodities, software, and technology within the region. Only a limited number of exceptions to BIS’s new license requirement are available. And apart from license applications for certain agricultural commodities, medicine, medical supplies, and replacement parts for medical supplies authorized under a Treasury Department general license, applications are subject to a policy of denial.
Note that BIS has defined the “Crimea region of Ukraine” for purposes of the new restrictions to include “the land territory in that region as well as any maritime area over which sovereignty, sovereign rights, or jurisdiction is claimed based on purported sovereignty over that land territory.”
The web of sanctions targeting Russia continues to grow more complex and unwieldy, requiring companies to exercise caution when dealing with customers in Russia and Ukraine, evaluate potential business on a transaction-by-transaction basis, and conduct significant due diligence.