The latest on Russia sanctions from the International Trade and Supply Chain Team
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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 U.S. Export Administration Regulations (“EAR”).  BIS created the Supplement No. 4 list two months ago in March 2022 to prohibit the export, reexport, or in-country transfer to or within Russia of specified items included on the list. (Husch Blackwell has previously provided more in-depth guidance on this here)  The Supplement No. 4 list is one of two (2) Russia Industry Sector Sanctions lists in the EAR, and Monday’s updates to the Supplement No. 4 list impose strict liability on any person who exports, reexports or transfers (in-country) the listed items to or within Russia.  Effective immediately (as of May 9, 2022, the date of filing for public inspection), the list has ballooned in size through the addition of 478 ten-digit Schedule B codes and 205 six-digit Harmonized Tariff Schedule (“HTS”) codes.  BIS has stated in the Final Rule that the HTS and Schedule B codes “are only intended to assist exporters with their AES filing responsibilities and does not indicate that all items classified under those HTS Codes or Schedule B numbers are subject to § 746.5(a)(1)(ii)’s restrictions.”  Rather, only those items described under the “HTS Description” column are controlled by the strict liability provisions of the Russian Industry Sector Sanctions.  BIS noted this approach is consistent with comparable controls imposed by the European Union indicating “[t]he expansion of these export controls under the EAR, implemented in parallel with similarly stringent measures by partner and ally countries, further limits sources of revenue that could support Russia’s military capabilities, as well as Russia’s ability to withstand the economic impact of the multilateral sanctions.”

Additions to the list include, but are not limited to, building materials, machinery, engines, industrial tooling, cooling and ventilation equipment and a variety of other items.  All license applications for exports, reexports or transfers (in-country) of items “subject to the EAR” and listed on the Supplement No. 4 list will be reviewed by BIS under a presumption of denial license review policy.  BIS will review applications for licenses that satisfy humanitarian needs using the less onerous case-by-case license review policy.  Under the Final Rule’s savings clause, any shipment that is affected by the Final Rule and is en route aboard a carrier to a port of export, reexport, or transfer (in-country) as of date of this Final Rule’s filing for public inspection (May 9, 2022) pursuant to actual orders may proceed to Russia under a previous and valid export authorization eligibility.

To view the updated list prior to its publication at Supplement No. 4 to 15 C.F.R. Part 746, click (here) and scroll to pages 10 through 38 of the PDF. The full list at Supplement No. 4 is maintained here.

Husch Blackwell’s Export Controls and Economic Sanctions Team continues to closely monitor all sanctions and export controls developments concerning Russia, Belarus, and Ukraine and will provide further updates as conditions change.  Additional sanctions actions on May 8, 2022 warrant an additional blog post, which we will release to readers as soon as it is ready.  Interested readers can also review content covering previous Russia, Belarus and Ukraine sanctions developments at the Husch Blackwell Russia Sanctions Resource Library.

Should you have any questions or concerns, please contact Cortney MorganGrant LeachTony Busch or Isabella Peek of our Export Controls and Economic Sanctions Team.

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Photo of Cortney Morgan Cortney Morgan

An experienced attorney in the area of international trade and supply chain issues, Cortney advises foreign and domestic clients on all aspects of international trade regulation, planning and compliance, including import (customs), export controls, economic sanctions, embargoes, international trade agreements and preference programs.

Photo of Grant Leach Grant Leach

Grant focuses his practice on international trade, international compliance, securities, mergers, acquisitions and general corporate matters.

Photo of Tony Busch Tony Busch

Tony advises clients on export control matters pertaining to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). Tony also provides the export control profile required for “critical technologies” analysis in Committee on Foreign Investment in the United States…

Tony advises clients on export control matters pertaining to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). Tony also provides the export control profile required for “critical technologies” analysis in Committee on Foreign Investment in the United States (CFIUS) matters. Additionally, Tony counsels clients seeking to comply with Census Bureau Foreign Trade Regulations (FTR), Bureau of Industry & Security (BIS) Anti-boycott Regulations, and Office of Foreign Assets Control (OFAC) sanctions.

Photo of Isabella Peek Isabella Peek

A love for international law drew Isabella to Georgetown Law and ultimately to Husch Blackwell.

Isabella’s early career experience working across the United States (D.C., Chicago, Reno, Omaha, Carson City), and experience studying abroad in England and Italy, solidified her ambition to work

A love for international law drew Isabella to Georgetown Law and ultimately to Husch Blackwell.

Isabella’s early career experience working across the United States (D.C., Chicago, Reno, Omaha, Carson City), and experience studying abroad in England and Italy, solidified her ambition to work with clients worldwide. Her passion for international issues is what first drew her to Georgetown Law School, and it later made Husch Blackwell a logical next career step.

Isabella’s skill and ambition made her a formidable competitor on the equestrian team in college, giving her the opportunity to build a high level of self-discipline and contribute to the success of a team. Her time management abilities helped Isabella perform at a high level both academically and as an equestrian. It’s that kind of accomplishment and organization that make her such an effective partner for clients and businesses around the globe.