License Exceptions Are Limited

The final rule limits the license exceptions available for items specified in any ECCN in CCL Categories 3-9 or that fall within the scope of the Russia FDPR. Only the following license exceptions may be used, and note that many are further limited:

  1. TMP (Temporary imports, exports, reexports, and transfers (incountry)) can be used for items for use by the news media as set forth in § 740.9(a)(9).
  2. GOV (Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station) can be used.
  3. TSU (Technology and software – unrestricted) can be used for software updates as described below.
  4. BAG (Baggage) can be used for the export of personal effects, household effects, vehicles, and tools of the trade, excluding firearms and ammunition (§ 740.14(e)).
  5. AVS (Aircraft, vessels, and spacecraft) can be used for aircraft/vessels on a temporary sojourn subject to restrictions and, more importantly, equipment and spare parts for use on vessels or aircraft (§ 740.15(a) and (b or d)).
  6. ENC (Encryption commodities, software, and technology) can be used for exports, reexports, and in-country transfers of applicable encryption items, excluding transactions with Russian “government end users” and Russian SoEs.
  7. CCD: Consumer Communications Devices, described below.

The two license exceptions most likely to prove useful are CCD and TSU, and we have provided a more detailed summary of each:

a. Commercial Communication Devices (CCD)

Given the number of minor consumer items that CCL Categories 3-9 contain, it is a relief that the BIS Rule permits the use of a license exception CCD, which allows for the export or reexport of certain consumer devices to and within certain users in Russia. We expect License Exception CCD will be very popular with the consumer products companies. Eligible products include:

  1. Consumer computers classified under ECCN 5A992.c or 4A994.b;
  2. Consumer disk drives and solid-state storage equipment classified under ECCN 5A992;
  3. Monitors classified under ECCN 5A992.c;
  4. Printers classified under ECCN 5A992.c;
  5. Modems classified under ECCN 5A991.b.2, 5A991.b.4., or 5A992.c; 
  6. Network access controllers and communications channel controllers classified under ECCN 5A991.b.4;
  7. Mobile phones, including cellular and satellite telephones, personal digital assistants, and subscriber information module (SIM) cards and similar devices classified under ECCN 5A992.c or 5A991;
  8. Memory devices classified under ECCN 5A992.c;
  9. Consumer “information security” equipment, “software” (except “encryption source code”) and peripherals classified under ECCN 5A992.c or 5D992.c;
  10. Digital cameras and memory cards classified under ECCN 5A992;
  11. Television and radio receivers classified under ECCN 5A992;
  12. Recording devices classified under ECCN 5A992; and
  13. Consumer “software” (except “encryption source code”) classified under ECCN 4D994, 5D991 or 5D992.c to be used for equipment described in the CCD list.

But watch out! The Russian Government and organizations administered or controlled by the Russian Government are not eligible end-users under license exception CCD. Also not eligible are Russian government officials, including Russian state-run media.

b. Technology and Software – Unrestricted

License exception TSU authorizes the export of software updates for civil end-users that are wholly-owned US subsidiaries, foreign subsidiaries of US companies that are joint ventures with other US and companies, joint ventures of US companies with companies headquartered in Country Groups A:5 and A:6, joint ventures of wholly-owned subsidiaries of companies headquartered in those countries.