Does your company export products or technology to India or South Sudan? If so, last Friday, the Commerce Department’s Bureau of Industry and Security (BIS) made changes to the export controls on these countries that may impact your operations, particularly if your company exports “600 series” military commodities, software, or technology or satellite-related items.
First, recognizing India’s membership in three out of four multilateral export control regimes and its status as a Major Defense Partner of the United States, BIS added India to Country Group A:5 in the Export Administration Regulations (EAR)—the list of close U.S. allies granted favorable export status. A key benefit of being an A:5 country is that U.S. companies can now use License Exception STA to export “600 series” military items as well as satellite-related items to India without the need to apply for a specific license. BIS also formally recognized India’s membership in the Wassenaar Arrangement, added India to Country Group A:1, and removed license requirements for EAR items controlled for National Security Column 2 reasons.
On the flip side, BIS also updated the EAR to add South Sudan to Country Group D:5—the list of countries that are subject to arms embargoes. This change is designed to ensure that the EAR’s D:5 list mirrors the State Department’s list of Section 126.1 prohibited countries in the International Traffic in Arms Regulations, to which South Sudan was added earlier this year. Although the amendment is mostly a formality, as the D:5 list includes a note stating that State’s Section 126.1 prohibited countries list is controlling, BIS’s rule serves to put exporters on notice of South Sudan’s new status. One important impact of the arms embargo designation is that exports to South Sudan of satellite-related items and “600 series” military items are subject to a general policy of denial, except for certain types of transactions, such as exports in support of peacekeeping and humanitarian operations. The D:5 designation also limits the ability of foreign companies utilizing U.S. “600 series” (or satellite-related) parts or components from shipping their end products incorporating such parts or components to South Sudan.