On May 8, 2024, BIS published a correction to the interim final rule, further removing license requirements for certain items under ECCN 0x5zz.

Previously, the interim final rule stated that all 0x5zz ECCNs referenced in footnote 9 to the Commerce Country Chart in supplement no. 1 to part 738 that were previously controlled for NS1 or RS1 reasons for control would continue to require a license for export to Australia and the UK based on the license requirements specified in that footnote.  However, the correction clarifies that only portions of the referenced 0x5zz ECCNs will continue to require a license.

On April 19, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued an interim final rule under the U.S. Export Administration Regulations (“EAR”) that significantly streamlines export controls on certain defense-related technology products to Australia and the United Kingdom (“UK”). Aimed at enhancing technological innovation among the three countries in furtherance of the Australia, United Kingdom, United States (“AUKUS”) Trilateral Security Partnership, the interim final rule removes license requirements, expands the availability of license exceptions, and reduces the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the UK.

In a statement, BIS said that it “anticipates these changes will reduce licensing burdens for trade with Australia and the UK by over 1,800 total licenses valued at over $7.5 billion per year.” BIS also states that the cumulative effect of these export control revisions under the EAR will be to treat Australia and the UK as destinations equivalent to Canada. BIS is soliciting public comments on the impacts of these changes to ensure that the export control revisions implemented advance AUKUS objectives, as well as potential additional revisions to the EAR that would further enhance defense industrial base cooperation and technology innovation with Australia and the UK. Interested parties should consider submitting comments to BIS by the June 3, 2024, deadline.

Notwithstanding this important regulatory development, export control revisions under AUKUS related to the U.S. International Traffic in Arms Regulations (“ITAR”) administered by the U.S. Department of State, Directorate of Defense Trade Controls (“DDTC”), have not yet been promulgated. Until that action occurs, industry will not be able to assess the full extent of U.S. export control revisions and continued licensing requirements that will be implemented under AUKUS.Continue Reading BIS Removes Significant Export Control License Requirements for Australia and the UK under the Strategic AUKUS Partnership

May 1, 2024, saw two major developments under the Australia, United Kingdom, and United States (“AUKUS”) Trilateral Security Partnership.

First, the U.S. Department of State (the “Department”) issued a notice of proposed rulemaking (“NPRM”) that would amend the International Traffic in Arms Regulations (“ITAR”) to create an exemption for certain exports, reexports, retransfers, or temporary imports of defense articles or defense services, or certain brokering activities between or among authorized users within Australia, the United Kingdom, and the United States.

Second, the UK Department for Business and Trade (“DBT”) issued Notice to Exporters 2024/09: update on AUKUS, which was accompanied by publication of a draft Open General Licence to permit the export, transfer, and supply or delivery, of dual-use goods, military goods or technology to, between, and among the AUKUS partners (“Draft AUKUS OGL”).

These developments signal clearly to industry that the AUKUS partners are committed to fostering greater cooperation across defense and critical technologies through reforms of their export controls and licensing regimes. Interested parties may wish to consider submitting comments on one or both proposals. The deadline for comments on the proposed United States ITAR rule is May 31, 2024. The deadline for comments on the UK Draft AUKUS OGL is July 1, 2024. Importantly, the NPRM for the ITAR does not yet have the force and effect of law until a final or interim final rule is promulgated. Similarly, the Draft AUKUS OGL cannot currently be relied upon and will not come into effect until a final version is issued.

United States: ITAR Exemptions

The Department’s proposed exemption would be available for all defense articles or defense services, except for those contained within a limited excluded list. The proposed rule would also introduce a provision to allow for certain transfers of classified defense articles to certain dual nationals (subject to certain requirements described below) and would codify an expedited license review process for Australia, the UK, and Canada.Continue Reading Trilateral AUKUS Partnership Further Strengthened with Proposed New U.S. ITAR Exemptions and UK Open General Licenses