Last week, the Bureau of Industry and Security (BIS) issued new guidance urging exporters to exercise heightened due diligence when exporting certain items to prevent them from being diverted to Russia. With the U.S. and Global Export Control Coalition’s imposition of Russian sanctions, it is imperative for exporters to understand and comply with regulations to prevent any potential illegal diversion. In this blog post, we will discuss the latest updates from the BIS and what it means for exporters who might be sending items that have the potential to be diverted to Russia.
Russia’s continued efforts to procure certain high-priority items create significant risks that persons both inside the United States and abroad may become (even inadvertently) entangled in violations of U.S. export controls and sanctions laws, resulting in potentially significant civil or criminal liability. According to the BIS, there has been an increased risk of certain items being diverted to Russia, particularly items that could potentially be used for military purposes. This includes items such as electronic components, sensors, bearings, optics, and aviation components, among others. As a result, BIS is urging exporters to exercise heightened due diligence when exporting these items or items with a potential for military use. Specifically, BIS recommends that exporters of these highest-priority items seek written assurances of compliance from their customers to help prevent diversion. The new guidance, along with a sample written certification form, can be found here.
When it comes to exporting in general, it is important to always understand and comply with regulations. Specifically, the BIS’s Export Administration Regulations (EAR) apply to companies that export dual-use items, which are commercial items with potential military applications. The regulations cover items that fall under the jurisdiction of the U.S. Department of Commerce and include both tangible and intangible items, such as blueprints, software, technical data, and more.
Since the imposition of export controls on Russia in February 2022, BIS has also added over 600 entities to the Entity List including over 60 in more than 20 countries other than Russia and Belarus. Foreign parties engaged in activities contrary to U.S. foreign policy and national security interests may also be added to BIS’s Entity List or the Treasury Department’s, Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons (SDN) List.
Given the heightened threat resulting from Russia’s continued attempts to evade U.S. export controls through third countries, exporters must be extra vigilant when exporting to any destination, especially for the nine Harmonized System (HS) codes that pose potential risks of illegal diversion to Russia. In particular, the BIS recommends that exporters seek assurances of compliance with U.S. export controls. It is best practice to receive these assurances in writing, for example, through a signed certification statement.
For exporters who have concerns or questions about specific products or export transactions, it is recommended to consult with trade compliance experts who specialize in export regulations. It is better to be safe than sorry when it comes to exporting certain products or items to Russia, especially with the current diversion risk climate and the risk of significant fines and penalties that noncompliance poses.
BIS’s urging to exercise heightened due diligence for certain exports to prevent diversion to Russia is not a cause for panic, but rather a call for exporters to be more vigilant and aware of potential risks before they proceed with an export. Exporters should always comply with regulations and perform due diligence checks to ensure they are not exporting items that could pose potential legal or security risks. With the current Russian sanctions, it is imperative to stay informed and take necessary measures to prevent any potential illegal diversion. By taking a proactive approach to compliance, exporters can rest assured they are taking the necessary steps to ensure they are do not run afoul of U.S. export laws and regulations.
Feel free to contact us if you have questions about this latest guidance or how Russian sanctions impact on your export transactions.
